Hello again,
In this blog I will give you a brief overview about the key changes that the Fair Work Act (FWA) 2009 has enabled. Today’s blog is about compulsory collective bargaining and Industrial Action.
This is very important for all incorporated employers, but places quite an onus on small businesses who don’t have an IR specialist to assist them. From a small business perspective, these next two provisions are arguably the most significant change! The FWA gives unions back their strength through collective bargaining and right of entry provisions, and certainly cuts them a piece of the employment relationship pie! Unions will be the default representative of its members, unless employees appoint a different representative!
3.Compulsory Collective bargaining – Effective 1 July 2009
Collective enterprise agreement-making is at the heart of the FWA. The FWA provides for new types of agreements, good faith bargaining, new approval processes and new content rules. The good faith bargaining rules will require employers to collectively bargain with employees (and their nominated bargaining representatives) where a majority of employees want this. So employers now have limited choices – use a modern award or go through an enterprise bargaining agreement process. There will be no individual contracts or AWA’s for those employees under $100,000.
It will be compulsory for employers to “bargain” with employee representatives, though the legislation says that “bargaining” does not amount to reaching agreement. Alarmingly, not only will agreements be able to contain pretty much any matters relevant to the relationship between employees and employers, they are also able to contain matters relevant to the relationship between unions and employers!!
Enterprise agreements must contain individual flexibility, dispute and consultation provisions. As is currently the case, employees will vote on an agreement and it will be approved by the FWA. In order to gain approval, agreements must pass the “better off” overall test and this appears to be more onerous than the current ‘no disadvantage test’. Unions will also have the option to be covered by an agreement simply by giving notice to FWA.
The Good Faith Bargaining Provisions in the act:
• Employers must recognise and bargain with employee representatives (including union officials)
• FWA will be able to make orders requiring parties to do things that will facilitate effective collective bargaining, such as attend meetings at specified times, disclose relevant information, give timely responses to negotiating positions. give genuine consideration to proposals and reasons for responses to those proposals, and refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining
• If a party is guilty of sustained and serious breaches of bargaining orders, FWA may issue a serious breach declaration. If a serious breach is declared, the FWA is required to arbitrate the outstanding matters that have not been agreed by the parties!
• FWA may also force employers to bargain if it determines that the majority of employees wish to do so.
• FWA will also have the power to declare that a group of employees to be covered by an agreement, thereby reducing flexibility and small group of employee agreements. Seemingly forcing an actual enterprise bargaining level agreement.
• Enterprise agreements can be made between a single employer and their employees or between more than one employer and their employees (multiple employer agreements).
• Unions may become parties to enterprise agreements if they represent at least one employee. This would provide unions with substantial rights at a particular enterprise!
• Mandatory clauses include dispute settlement by FWA or another independent person; a nominal expiry date of up to four years; consultation on major workplace changes and flexibility arrangements. In considering approval of agreements, FWA will consider if each employee is “better off overall” under the agreement, compared to an applicable modern award.
• There are special provisions for low paid workers in certain industries – e.g. cleaners, security.
What you need to do: Employers and small business in particular need to develop a clear industrial relations strategy appropriate for your business. My Performance Coach will help you to ensure that you understand the options open to you in order to operate your business effectively.
4.Industrial Action – Effective 1 July 2009
Interestingly, most of the industrial action provisions made by the Howard Government have been retained. No industrial action may be taken before an agreement reaches its nominal expiry date. The requirement for a secret ballot of employees to approve industrial action has been retained. Protected industrial action is immune from civil actions for damages against unions or employees properly engaging in industrial action. FWA will now have powers to order industrial action to stop.
The FWA introduces a number of new changes:
Protected industrial action will be permissible once the secret ballot and notice requirements have been met
Introduction of three types of protected industrial action - “employee claim action”, “employee response action” and “employer response action”
Introduction of express “common requirements” that must be met for industrial action to be protected action. Including parties genuinely try to reach agreement, comply with industrial action orders and are not engaged in pattern bargaining.
Employer industrial action will only be protected action where it is taken in response to industrial action taken by its employees (i.e. no pre-emptive lock outs)
The introduction of extensive new rules regarding payments made to employees for imposed partial work or overtime bans.
The FWA will have the power to suspend or terminate the industrial action if it is causing significant harm to the wider economy, community or third parties or for the purposes of “cooling-off”. FWA will also be able to suspend or terminate industrial action if it causes significant economic harm to the bargaining participants.
What you need to do: Traditionally Industrial Action rules and strategies have been problematic for employers and caused much confusion. We will make sure you know exactly what your rights are when dealing with unions and ensure we step you through what you need to do. We’ll clarify what you can and can’t do and create clarity for you.
MY PERFORMANCE COACH - HR ON CALL SERVICE
My Performance Coach specialises in assisting small to medium enterprises with their Human Resource and IR issues, through our HR ON CALL services. HR ON CALL is a fantastic service assisting SME’s to get the best out of their human resources and manage IR appropriately, ensuring effective protection and compliance with legislation.
HR ON CALL is a one year subscription service that offers personalised advice and guidance for your business and specific situations. And because we understand that cashflow is important, we bill you quarterly!
My Performance Coach provides strategic Human Resource service enabling businesses to build a strong, integrated HR and IR strategy giving them a clear competitive advantage over their competitors. My Performance Coach also offers Executive/Manager Coaching and training managers to ensure your business is able to easily and proactively manage their human resources effectively and these significant changes in the IR landscape!
DisclaimerThis article is intended to provide commentary and general information. It should not be relied upon as comprehensive or legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. My Performance Coach 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.
Tuesday, July 28, 2009
Sunday, July 12, 2009
Changes to the definition of a small business and unfair dismissal
Hello again,
In this blog I will give you a brief overview about the changes that the Fair Work Act (FWA) 2009 has enabled.
1) SMALL BUSINESS DEFINITION
If you are an incorporated company, then you are defined as a 'national system employer' and subject to the unfair dismissal laws and other elements of the FWA 2009. If you are not incorporated then you are subject to the state law in which your business is located.
If you are subject to the FWA then, the first thing you need to establish is are you a small business?
The FWA reduces the definition of a small business down to 15 FTE. This is an interesting definition, because by implication a business employing 16+ employees is now a large business. Well watch out Telstra! This has come into effect at 1 July.
The FTE calculation includes all full time, part time employees and regular/systematic casuals. This includes the employee who is dismissed if there is an unfair dismissal claim. And this is per entity, so if you have several businesses under the one banner, then you must count all those employees (all related associated entities).
2) UNFAIR DISMISSAL LAWS
If you are a large employer (see above), then employees now have access to unfair dismissal remedies if they have completed 6 months service and are under the high income threshold ($108,300 per annum).
If you are a small business (as per definition above) then employees can claim unfair dismissal at 12 months and under the high income threshold.
This includes Casual employees who are engaged on a regular and systematic basis. Yes they now also have unfair dismissal rights under both definitions!
NB/. Unfair dismissal claims must be lodged now within 14 days of dismissal.
If you are a small business, you may dismiss an employee fairly after 12 months if the you comply with the Fair Dismissal Code for Small Business. The code includes the right to dismiss employees for capacity or conduct reasons after one warning.
Fair Work Aust will determine unfair dismissal claims via informal conferences or hearings. FWA will discuss issues directly with the Employer and the Employee and will not allow legal or fee paid agent representation unless in exceptional circumstances. Appeals will only be allowed in limited circumstances!
Reinstatement will be the primary remedy and compensation will remain at a maximum of six months. Courts may also award penalties of up to $6,600 for individuals and $33,000 for corporations.
Under the FWA, there are now fewer exclusions from the unfair dismissal provisions. This means that there is an increased likelihood of unfair dismissal claims against businesses. Redundancy is now the only exclusion for unfair dismissal (see redundancy in a later blog).
FWA retains the existing unlawful termination provisions. A termination is unlawful if the decision to terminate is based upon one or more of the prohibited reasons or if the termination is effected without satisfying the minimum period of notice (e.g. physical disability).
WHAT DO YOU NEED TO DO:
Avoiding a claim of unfair dismissal can be complex. We strongly advise you to seek the help of HR specialists like My Performance Coach or a specialist Employment Lawyer.
You need to ensure that all your contracts, policies, processes and training are updated and compliant with the FWA.
You should also ensure you have clear and strong job descriptions and performance standards (both quantifiable and behavioural) for all roles in the workplace.
My Performance Coach can help you to ensure that you have everything you need in place to be able to lift underperformance and where required, fairly dismiss an employee. Substantive and Procedural fairness is critical to ensuring you do not fall foul of this legislation. We will help you set up your system and if something goes wrong, we’ll be there to support and guide you, stepping you through the process. We can also provide highly effective training for the managers to ensure they understand their obligations and do not put your business at risk.
MY PERFORMANCE COACH - HR ON CALL SERVICE
My Performance Coach specialises in assisting small to medium enterprises with their Human Resource and IR issues, through our HR ON CALL services. HR ON CALL is a fantastic service assisting SME’s to get the best out of their human resources and manage IR appropriately, ensuring effective protection and compliance with legislation.
HR ON CALL is a one year subscription service that offers personalised advice and guidance for your business and specific situations. And because we understand that cashflow is important, we bill you quarterly!
My Performance Coach provides strategic Human Resource service enabling businesses to build a strong, integrated HR and IR strategy giving them a clear competitive advantage over their competitors. My Performance Coach also offers Executive/Manager Coaching and training managers to ensure your business is able to easily and proactively manage their human resources effectively and these significant changes in the IR landscape!
Disclaimer
This article is intended to provide commentary and general information. It should not be relied upon as comprehensive or legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. My Performance Coach 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.
In this blog I will give you a brief overview about the changes that the Fair Work Act (FWA) 2009 has enabled.
1) SMALL BUSINESS DEFINITION
If you are an incorporated company, then you are defined as a 'national system employer' and subject to the unfair dismissal laws and other elements of the FWA 2009. If you are not incorporated then you are subject to the state law in which your business is located.
If you are subject to the FWA then, the first thing you need to establish is are you a small business?
The FWA reduces the definition of a small business down to 15 FTE. This is an interesting definition, because by implication a business employing 16+ employees is now a large business. Well watch out Telstra! This has come into effect at 1 July.
The FTE calculation includes all full time, part time employees and regular/systematic casuals. This includes the employee who is dismissed if there is an unfair dismissal claim. And this is per entity, so if you have several businesses under the one banner, then you must count all those employees (all related associated entities).
2) UNFAIR DISMISSAL LAWS
If you are a large employer (see above), then employees now have access to unfair dismissal remedies if they have completed 6 months service and are under the high income threshold ($108,300 per annum).
If you are a small business (as per definition above) then employees can claim unfair dismissal at 12 months and under the high income threshold.
This includes Casual employees who are engaged on a regular and systematic basis. Yes they now also have unfair dismissal rights under both definitions!
NB/. Unfair dismissal claims must be lodged now within 14 days of dismissal.
If you are a small business, you may dismiss an employee fairly after 12 months if the you comply with the Fair Dismissal Code for Small Business. The code includes the right to dismiss employees for capacity or conduct reasons after one warning.
Fair Work Aust will determine unfair dismissal claims via informal conferences or hearings. FWA will discuss issues directly with the Employer and the Employee and will not allow legal or fee paid agent representation unless in exceptional circumstances. Appeals will only be allowed in limited circumstances!
Reinstatement will be the primary remedy and compensation will remain at a maximum of six months. Courts may also award penalties of up to $6,600 for individuals and $33,000 for corporations.
Under the FWA, there are now fewer exclusions from the unfair dismissal provisions. This means that there is an increased likelihood of unfair dismissal claims against businesses. Redundancy is now the only exclusion for unfair dismissal (see redundancy in a later blog).
FWA retains the existing unlawful termination provisions. A termination is unlawful if the decision to terminate is based upon one or more of the prohibited reasons or if the termination is effected without satisfying the minimum period of notice (e.g. physical disability).
WHAT DO YOU NEED TO DO:
Avoiding a claim of unfair dismissal can be complex. We strongly advise you to seek the help of HR specialists like My Performance Coach or a specialist Employment Lawyer.
You need to ensure that all your contracts, policies, processes and training are updated and compliant with the FWA.
You should also ensure you have clear and strong job descriptions and performance standards (both quantifiable and behavioural) for all roles in the workplace.
My Performance Coach can help you to ensure that you have everything you need in place to be able to lift underperformance and where required, fairly dismiss an employee. Substantive and Procedural fairness is critical to ensuring you do not fall foul of this legislation. We will help you set up your system and if something goes wrong, we’ll be there to support and guide you, stepping you through the process. We can also provide highly effective training for the managers to ensure they understand their obligations and do not put your business at risk.
MY PERFORMANCE COACH - HR ON CALL SERVICE
My Performance Coach specialises in assisting small to medium enterprises with their Human Resource and IR issues, through our HR ON CALL services. HR ON CALL is a fantastic service assisting SME’s to get the best out of their human resources and manage IR appropriately, ensuring effective protection and compliance with legislation.
HR ON CALL is a one year subscription service that offers personalised advice and guidance for your business and specific situations. And because we understand that cashflow is important, we bill you quarterly!
My Performance Coach provides strategic Human Resource service enabling businesses to build a strong, integrated HR and IR strategy giving them a clear competitive advantage over their competitors. My Performance Coach also offers Executive/Manager Coaching and training managers to ensure your business is able to easily and proactively manage their human resources effectively and these significant changes in the IR landscape!
Disclaimer
This article is intended to provide commentary and general information. It should not be relied upon as comprehensive or legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. My Performance Coach 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.
Subscribe to:
Comments (Atom)