Some key issues are emerging for employers as the Fair Work Act nears its first anniversary of operation and the Modern Awards mark six months of implementation.
1 July 2010 marks the first anniversary of the implementation of the Fair Work Act, and nearly six months since Modern Awards and the National Employment Standards started operating. Some key issues emerging are:
Compliance with Modern Awards: The new modern awards remain one of the top issues for employers. In many industries, employees are now covered by awards for the first time. There are no quick fixes to ensure award compliance - employers must first determine award coverage of their staff, then review their employment conditions in detail to ensure that they are complying with the new modern awards. Once the issues are identified, there is a variety of strategies which can be adopted to ensure compliance – including changing conditions use of high income guarantees (the terms of an award will not apply to a high income earner who accepts a guarantee) use of individual flexibility arrangements under modern awards (which may enable changes to the operation of award terms) use of 'minimum entitlements' provisions relying on the absorption provisions in modern awards relying on transitional provisions in modern awards, and making a collective agreements.
National Employment Standards: Most of the conditions embodied in the NES are not new and are relatively straightforward. However, some emerging issues include:
- the right to request flexible work arrangements, and
- redundancy pay – the new universal entitlement where two key areas are not widely understood:
- employees within the coverage of an old state award (NAPSA) (e.g the Clerical and Administrative Employees (State) Award) may be entitled to a higher scale of redundancy pay contained in the old award
- employees who did not previously have an entitlement to redundancy pay have their service counted from 1 January 2010 (not their earlier employment start date).
Redundancy: Consultation, Redeployment, Unfair Dismissals: Under the old system of Work Choices, an employee could not claim unfair dismissal over a genuine redundancy. This has changed under the Fair Work Act with a redundant employee being able to claim unfair dismissal if:
- the employer did not comply with consultation obligations and requirements under an award or enterprise agreement, or
- the employer failed to take reasonable steps to redeploy the employee, including with a related company. Furthermore, a union or employee can seek compensation over a failure to comply with an award or agreement, particularly the consultation requirements of modern awards.
Acquiring and Transferring Employees: Where an employee is transferred from one employer to another in a 'transfer of business', the new employer is bound by the old employer's employment agreements, awards and conditions in relation to the transferring employees. Employers need to remember that "transfer of business" is now widely defined and includes transfers of employees within a group of related companies. This can create significant complications where there are a number of subsidiaries with different conditions – typically the case with a group built up through acquisitions.
Individual Employee Claims: Since the Fair Work Act offered new and expanded rights, including breach of awards and adverse action claims, there has been a sharp rise in cases by individual employees.
Contact Your HRmanager for assistance in determining the award coverage of your employees and understanding your employment obligations.