Industrial LawIndustrial Law

Law Extension CommitteeLaw Extension Committee

Winter 2010Winter 2010

2. Workplace 2. Workplace Relations SystemRelations System

Conciliation and arbitration Conciliation and arbitration powerpower

Section 51(xxxv): Section 51(xxxv):

““Conciliation and arbitration for the Conciliation and arbitration for the prevention and settlement of prevention and settlement of industrial disputes extending beyond industrial disputes extending beyond the limits of any one state.the limits of any one state.””

Conciliation and arbitration Conciliation and arbitration powerpower

Features: Features: Cannot legislate directly for terms Cannot legislate directly for terms

and conditions of employment; and conditions of employment; Permits establishment of a process – Permits establishment of a process –

conciliation and arbitration; conciliation and arbitration; Only for the prevention or Only for the prevention or

settlement of industrial disputes; settlement of industrial disputes; Only industrial disputes extending Only industrial disputes extending

beyond the limits of any one state. beyond the limits of any one state.

New South Wales v New South Wales v Commonwealth[2006] HCA Commonwealth[2006] HCA

52: 52: Kirby J (at [434]): Kirby J (at [434]):

““If s 51(xx) of the Constitution now provides a If s 51(xx) of the Constitution now provides a legitimate source federal law with respect to legitimate source federal law with respect to industrial disputes, by inference it always did. industrial disputes, by inference it always did. All those hard-fought decisions of this Court All those hard-fought decisions of this Court and the earnest presentation of cases, the and the earnest presentation of cases, the advocacy and the judicial analysis and advocacy and the judicial analysis and elaboration within them concerning the ambit elaboration within them concerning the ambit of s 51(xxxv) of the Constitution were of s 51(xxxv) of the Constitution were (virtually without exception) a complete (virtually without exception) a complete waste of the Court’s time and energies.” waste of the Court’s time and energies.”

Corporations powerCorporations power

Section 51(xx): Section 51(xx):

““Foreign corporations, and trading or Foreign corporations, and trading or financial corporations formed within financial corporations formed within the limits of the Commonwealth.” the limits of the Commonwealth.”

Constitutional Constitutional corporationcorporation

R v Federal Court; Ex parte WA Football R v Federal Court; Ex parte WA Football LeagueLeague (1979) 143 CLR 190: (1979) 143 CLR 190:

“… “… for constitutional purposes a for constitutional purposes a corporation will satisfy the description corporation will satisfy the description ‘trading corporation’ if trading is a ‘trading corporation’ if trading is a substantial corporate activity. Once it is substantial corporate activity. Once it is found that trading is a substantial and not found that trading is a substantial and not a merely peripheral activity, the a merely peripheral activity, the conclusion that the corporation is a conclusion that the corporation is a trading corporation is open.” trading corporation is open.”

New South Wales v New South Wales v Commonwealth (2006) 299 Commonwealth (2006) 299

CLR 1: CLR 1: A law will be valid under s 51(xx) so long A law will be valid under s 51(xx) so long

as it either (at [198]): as it either (at [198]): The law singles out constitutional The law singles out constitutional

corporations as the object of statutory corporations as the object of statutory command (eg. a corporation shall or command (eg. a corporation shall or shall not … ); orshall not … ); or

The law is directed at protecting The law is directed at protecting constitutional corporations from conduct constitutional corporations from conduct intended or likely to cause loss or intended or likely to cause loss or damage to the corporation. damage to the corporation.

Other heads of powerOther heads of power

Trade and commerce power (s 51(i)); Trade and commerce power (s 51(i)); Taxation power (s 51(ii)); Taxation power (s 51(ii)); Defence power (s 51(vi)); Defence power (s 51(vi)); External affairs (s 51 (xxix)); External affairs (s 51 (xxix)); Commonwealth employees power (s Commonwealth employees power (s

52(i)); 52(i)); Territories power (s 122). Territories power (s 122).

Who does the Federal Who does the Federal system apply to? system apply to?

Section 13 defines an “national system Section 13 defines an “national system employee”: employee”:

A A national system employee national system employee is an is an individual so far as he or she is employed, individual so far as he or she is employed, or usually employed, as described in the or usually employed, as described in the definition of definition of national system employer national system employer in section 14, by a national system in section 14, by a national system employer, except on a vocational employer, except on a vocational placement. placement.

Who does the Federal Who does the Federal system apply to?system apply to?

Section 14 defines an “national system employer”: Section 14 defines an “national system employer”:

a constitutional corporation; a constitutional corporation; the Commonwealth or a Commonwealth authority; the Commonwealth or a Commonwealth authority; a person or entity who employs an individual as a a person or entity who employs an individual as a

flight crew officer, a maritime employee or a flight crew officer, a maritime employee or a waterside worker; or waterside worker; or

a body corporate incorporated in a Territory; a body corporate incorporated in a Territory; a person or entity that carries on an activity in a a person or entity that carries on an activity in a

Territory in Australia, so far as the person or entity Territory in Australia, so far as the person or entity employs, or usually employs, an individual in employs, or usually employs, an individual in connection with the activity carried on in the connection with the activity carried on in the Territory. Territory.

Referral of powersReferral of powers

The The Industrial Relations (Commonwealth Industrial Relations (Commonwealth Powers) Act Powers) Act 2009 (NSW) referred to 2009 (NSW) referred to Commonwealth powers with respect to Commonwealth powers with respect to terms and conditions of employment or terms and conditions of employment or rights and responsibilities of employers, rights and responsibilities of employers, employees or association (s 5). employees or association (s 5).

Excludes state public sector employees, Excludes state public sector employees, law enforcement officers and local law enforcement officers and local government sector employees (s 6). government sector employees (s 6).

Referral of powers (cont)Referral of powers (cont)

Reference excludes: Reference excludes: Superannuation, workers compensation and Superannuation, workers compensation and

occupational health and safety; occupational health and safety; Outworkers and child labour; Outworkers and child labour; Training arrangements; Training arrangements; Long service leave, victims of crime leave, jury Long service leave, victims of crime leave, jury

service;service; Essential services in an emergency; Essential services in an emergency; Employee and employer associations; Employee and employer associations; Workplace surveillance and trading hours; Workplace surveillance and trading hours; Enforcement of contract of employment.Enforcement of contract of employment.

Federal/state balanceFederal/state balance

FWA, s26 Act excludes some State and Territory FWA, s26 Act excludes some State and Territory lawslaws

          (1)  This Act is intended to apply to the exclusion of all State or (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 Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system relation to a national system employee or a national system employer. employer.

A State or Territory industrial law includes: A State or Territory industrial law includes: A general State industrial law, including the A general State industrial law, including the Industrial Industrial

Relations Act Relations Act 1996 (NSW); 1996 (NSW); An Act of a State or Territory that applies to An Act of a State or Territory that applies to

employment generally or dealing with leave;employment generally or dealing with leave; Laws providing for equal remuneration, unfair Laws providing for equal remuneration, unfair

employment contracts or union right of entry; employment contracts or union right of entry; An instrument made under such a law. An instrument made under such a law.

Exceptions – s 27Exceptions – s 27 Discrimination laws; Discrimination laws; Superannuation; Superannuation; Workers compensation; Workers compensation; Occupational health and safety; Occupational health and safety; Outworkers and child labour; Outworkers and child labour; Long service leave; Long service leave; Leave of victims of crime and jury service; Leave of victims of crime and jury service; Public holidays; Public holidays; Provision of essential services in an emergency; Provision of essential services in an emergency; Regulation of industrial organisations; Regulation of industrial organisations; Workplace surveillance; Workplace surveillance; Business trading hours; Business trading hours; Enforcement of employment contracts. Enforcement of employment contracts.

Federal institutionsFederal institutions

Fair Work Australia (FWA); Fair Work Australia (FWA);

Fair Work Ombudsman; Fair Work Ombudsman;

Fair Work Inspectors; Fair Work Inspectors;

Fair Work Division of the Federal Fair Work Division of the Federal Court and Federal Magistrate’s Court and Federal Magistrate’s Court. Court.

National Employment National Employment Standards (NES)Standards (NES)

Minimum standards for: Minimum standards for: Maximum weekly hours; Maximum weekly hours; Requests for flexible working Requests for flexible working

arrangements; arrangements; Parental leave, including maternity, Parental leave, including maternity,

paternity and adoption leave; paternity and adoption leave; Annual leave; Annual leave; Personal/carer’s leave and Personal/carer’s leave and

compassionate leave;compassionate leave;

NES (cont.)NES (cont.)

Community service leave; Community service leave; Long service leave; Long service leave; Public holidays; Public holidays; Notice of termination and Notice of termination and

redundancy pay; redundancy pay; Fair Work Information Statement. Fair Work Information Statement.

Maximum weekly hours Maximum weekly hours (s 62)(s 62)

An employer must not request or require an An employer must not request or require an employee to work more than 38 hours per employee to work more than 38 hours per week unless the additional hours are week unless the additional hours are reasonable. reasonable.

Whether hours are reasonable is assessed Whether hours are reasonable is assessed taking into account any risk to health and taking into account any risk to health and safety, the employee’s personal safety, the employee’s personal circumstances, the needs of the enterprise, circumstances, the needs of the enterprise, whether overtime is paid, notice to the whether overtime is paid, notice to the employee, usual pattern of work in the employee, usual pattern of work in the industry and employee’s role. industry and employee’s role.

Flexible working Flexible working arrangements arrangements

(s 65)(s 65) An employee who is a parent (or has An employee who is a parent (or has

responsibility for the care of a child) responsibility for the care of a child) may request a change in working may request a change in working arrangements to assist in caring for the arrangements to assist in caring for the child if the child is under school age or child if the child is under school age or under 18 and has a disability. under 18 and has a disability.

An employer may only refuse such a An employer may only refuse such a request on reasonable business grounds request on reasonable business grounds and must provide a written response. and must provide a written response.

Parental leaveParental leave

An employee is entitled to 12 months An employee is entitled to 12 months of unpaid parental leave associated of unpaid parental leave associated with the birth of a child if the employee with the birth of a child if the employee has or will have responsibility for the has or will have responsibility for the care of the child (s 70). care of the child (s 70).

An employee may request an extension An employee may request an extension of unpaid parental leave up to 24 of unpaid parental leave up to 24 months but employer can refuse on months but employer can refuse on reasonable business grounds (s 76). reasonable business grounds (s 76).

Annual leave Annual leave

For each year of service, an employee is For each year of service, an employee is entitled to 4 weeks paid annual leave (5 entitled to 4 weeks paid annual leave (5 weeks for 7 day shift workers) (s 87). weeks for 7 day shift workers) (s 87).

Annual leave may be taken for a period Annual leave may be taken for a period agreed between the employer and agreed between the employer and employee but employer must not employee but employer must not unreasonably refuse to agree (s 88). unreasonably refuse to agree (s 88).

Cashing out can only occur in accordance Cashing out can only occur in accordance with an award, enterprise agreement or with an award, enterprise agreement or Act (s 92-94).Act (s 92-94).

Personal/carer’s leavePersonal/carer’s leave

An employee is entitled to: An employee is entitled to: 10 days of paid personal/carer’s leave 10 days of paid personal/carer’s leave

for each year of service (s 96). for each year of service (s 96). 2 days unpaid carer’s leave if member of 2 days unpaid carer’s leave if member of

immediate family requires care (s 102). immediate family requires care (s 102). 2 days of compassionate leave if 2 days of compassionate leave if

member of immediate family has illness member of immediate family has illness or injury that poses serious threat to life or injury that poses serious threat to life or dies (s 104). or dies (s 104).

Community service leaveCommunity service leave

An employee is entitled to leave for An employee is entitled to leave for jury service or a volunteer jury service or a volunteer emergency management activity (s emergency management activity (s 109). 109).

Community service leave is unpaid Community service leave is unpaid except for jury service. except for jury service.

An employee undertaking jury An employee undertaking jury service is entitled to paid leave for service is entitled to paid leave for the first 10 days of absence (s 111). the first 10 days of absence (s 111).

Long service leaveLong service leave

State long service leave legislation State long service leave legislation continues to apply, including the continues to apply, including the Long Service Leave Act Long Service Leave Act 1955 (NSW) 1955 (NSW) (s 27(2)(g)). (s 27(2)(g)).

An employee previously entitled to An employee previously entitled to long service leave under an award or long service leave under an award or agreement will continue to be agreement will continue to be entitled to long service leave under entitled to long service leave under those provisions (s 113). those provisions (s 113).

Public holidaysPublic holidays

An employee is entitled to be absent from his An employee is entitled to be absent from his or her employment on a public holiday (s or her employment on a public holiday (s 114(1)). 114(1)).

An employer may request an employee work An employer may request an employee work on a public holiday, but the employee may on a public holiday, but the employee may refuse if the request is not reasonable or the refuse if the request is not reasonable or the refusal is reasonable (s 114(2) and (3)). refusal is reasonable (s 114(2) and (3)).

Have regard to factors such as nature of work, Have regard to factors such as nature of work, personal circumstances, reasonable personal circumstances, reasonable expectation of employee, payment and notice expectation of employee, payment and notice (s 114(4)).(s 114(4)).

Notice and redundancyNotice and redundancy

An employer must not terminate an An employer must not terminate an employee’s employment unless a employee’s employment unless a minimum period of written notice is given minimum period of written notice is given of up to 4 weeks (or 5 weeks if over 45) of up to 4 weeks (or 5 weeks if over 45) depending upon length of service (s 117). depending upon length of service (s 117).

Does not apply to employees for a specific Does not apply to employees for a specific task or period, termination for serious task or period, termination for serious misconduct, casual employees, employees misconduct, casual employees, employees under a training arrangement or daily under a training arrangement or daily hire employees (s 123). hire employees (s 123).

Notice and redundancy Notice and redundancy (cont.)(cont.)

An employee who is made redundant is An employee who is made redundant is entitled to be paid redundancy pay entitled to be paid redundancy pay depending upon length of service (s 119). depending upon length of service (s 119).

An employee is redundant if terminated:An employee is redundant if terminated:

(a)(a)because the employer no longer requires because the employer no longer requires the job done by anyone (other than the job done by anyone (other than ordinary or customary turnover of labour); ordinary or customary turnover of labour);

(b)(b)because of insolvency or bankruptcy. because of insolvency or bankruptcy.

Fair work information Fair work information statementstatement

The Fair Work Information Statement The Fair Work Information Statement must contain information about the NES, must contain information about the NES, modern awards, agreement-making, modern awards, agreement-making, freedom of association, termination of freedom of association, termination of employment, right of entry, etc (s 124). employment, right of entry, etc (s 124).

An employer must give every employee the An employer must give every employee the Fair Work Information Statement before, Fair Work Information Statement before, or as soon as practicable after, the or as soon as practicable after, the employee starts employment (s 125). employee starts employment (s 125).

Minimum wagesMinimum wages

FWA must conduct an annual wage FWA must conduct an annual wage review an vary the national minimum review an vary the national minimum wage order or modern award wages (s wage order or modern award wages (s 285). 285).

FWA must determine a national FWA must determine a national minimum wage order setting a national minimum wage order setting a national minimum wage and special minimum minimum wage and special minimum wages for junior employees, employees wages for junior employees, employees under training arrangements and under training arrangements and employees with a disability (s 294). employees with a disability (s 294).

Modern awardsModern awards

FWA is required to establish a system of FWA is required to establish a system of “modern awards” that: “modern awards” that: are simple and easy to apply; are simple and easy to apply; provide a fair minimum safety net; provide a fair minimum safety net; are economically sustainable; are economically sustainable; promote collective enterprise promote collective enterprise bargaining; bargaining; constitute a certain, stable and constitute a certain, stable and sustainable modern award system. sustainable modern award system.

Terms of modern awardsTerms of modern awards

Modern awards may deal with (s 139): Modern awards may deal with (s 139): minimum wages; minimum wages; type of employment (full-time, part-time, type of employment (full-time, part-time,

casual, shift work and flexible work casual, shift work and flexible work arrangements); arrangements);

hours of work, rostering, etc; hours of work, rostering, etc; overtime rates; overtime rates; penalty rates for unsociable hours, penalty rates for unsociable hours,

weekends or public holidays or shift work; weekends or public holidays or shift work;

Terms of modern awards Terms of modern awards (cont.)(cont.)

annualised wage and salary arrangements; annualised wage and salary arrangements; allowances for expenses, skill or allowances for expenses, skill or

disabilities associated with particular disabilities associated with particular work; work;

leave and leave loading; leave and leave loading; superannuation;superannuation; consultation, representation and dispute consultation, representation and dispute

settling procedures; settling procedures; terms that supplement the NES (s 55). terms that supplement the NES (s 55).

Terms of modern awards Terms of modern awards (cont.)(cont.)

A modern award must not contain:A modern award must not contain: an objectionable term; an objectionable term; terms requiring unreasonable terms requiring unreasonable

deductions from wages; deductions from wages; discriminatory terms; discriminatory terms; terms containing state-based terms containing state-based

differences;differences; terms dealing with long service leave. terms dealing with long service leave.

Application of modern Application of modern awardsawards

A modern award applies to an employer A modern award applies to an employer or employee if the modern award (s 47): or employee if the modern award (s 47): is expressed to cover the employer or is expressed to cover the employer or employee; employee; is in operation; andis in operation; andno other provision of the Act provides no other provision of the Act provides that the modern award not apply; that the modern award not apply; but does not apply to a “high income but does not apply to a “high income employee”. employee”.

Enterprise agreementsEnterprise agreements

Types of enterprise agreements (s 172):Types of enterprise agreements (s 172): Single-enterprise agreement made by Single-enterprise agreement made by

an employer (or related employers); an employer (or related employers); Multi-enterprise agreement made by a Multi-enterprise agreement made by a

number of employers; number of employers; Greenfields agreement between Greenfields agreement between

employer(s) and one or more employee employer(s) and one or more employee organisation relating to a business organisation relating to a business being established. being established.

Bargaining and Bargaining and representationrepresentation

An employer must give notice to employees An employer must give notice to employees who will be covered by the agreement of who will be covered by the agreement of the right to be represented (s 173). the right to be represented (s 173).

An employer must ensure employees are An employer must ensure employees are given a copy of or access to the proposed given a copy of or access to the proposed agreement 7 days before it is voted upon (s agreement 7 days before it is voted upon (s 180). 180).

An employer may ask employees to approve An employer may ask employees to approve the agreement by voting for it (s 181). the agreement by voting for it (s 181).

Approval of agreementsApproval of agreements

FWA must approve an agreement if it was FWA must approve an agreement if it was (s186):(s186):

genuinely agreed to by the employees and genuinely agreed to by the employees and employer(s); employer(s);

do not contravene s 55; do not contravene s 55; passes the better off overall test (“BOOT”); passes the better off overall test (“BOOT”); group of employees was fairly chosen; group of employees was fairly chosen; does not contain unlawful terms; does not contain unlawful terms; not contrary to good faith bargaining. not contrary to good faith bargaining.

Better off overall test Better off overall test (“BOOT”)(“BOOT”)

Section 193(1): Section 193(1):

An enterprise agreement ... passes the An enterprise agreement ... passes the better off overall test ... if FWA is better off overall test ... if FWA is satisfied ... that award covered satisfied ... that award covered employee, or prospective award covered employee, or prospective award covered employee, for the agreement would be employee, for the agreement would be better off overall if the agreement better off overall if the agreement applied to the employee than if the applied to the employee than if the relevant modern award applied to the relevant modern award applied to the employee. employee.

Good faith bargainingGood faith bargaining

Bargaining representative must comply with Bargaining representative must comply with good fair bargaining requirements including (s good fair bargaining requirements including (s 228):228):attending meetings at reasonable times; attending meetings at reasonable times; disclosing information in a timely manner; disclosing information in a timely manner; responding to and giving genuine responding to and giving genuine consideration to proposals; consideration to proposals; refraining from capricious or unfair conduct; refraining from capricious or unfair conduct; recognising other bargaining representatives. recognising other bargaining representatives.

Bargaining ordersBargaining orders

To assist bargaining, FWA may make a : To assist bargaining, FWA may make a : Bargaining order specifying actions to Bargaining order specifying actions to be taken to comply with good faith be taken to comply with good faith bargaining requirements (s 230-231); bargaining requirements (s 230-231); Serious breach declaration (s 234-235); Serious breach declaration (s 234-235); Majority support determination (s 236-Majority support determination (s 236-237); 237); Scope order (s 238). Scope order (s 238).

Workplace Workplace determinationsdeterminations

Upon application by a bargaining Upon application by a bargaining representative, FWA may make the representative, FWA may make the following determinations: following determinations: Low-paid workplace determination (s Low-paid workplace determination (s 262-263); 262-263); Industrial action related workplace Industrial action related workplace determination (s266-267); determination (s266-267); Bargaining related workplace Bargaining related workplace determination (s 269-270). determination (s 269-270).

NES, awards and NES, awards and agreementsagreements

A modern award or enterprise agreement A modern award or enterprise agreement cannot exclude the NES, but may cannot exclude the NES, but may supplement NES standards or have supplement NES standards or have ancillary provisions (s 55); ancillary provisions (s 55);

A modern award does not apply to an A modern award does not apply to an employee when an enterprise agreement employee when an enterprise agreement applies except outworker terms (s 57); applies except outworker terms (s 57);

Only one enterprise agreement can apply Only one enterprise agreement can apply to an employee at a particular time (s to an employee at a particular time (s 58). 58).

Transfer of businessTransfer of business

Transfer of business occurs when (s 311): Transfer of business occurs when (s 311): Employment with old employer is Employment with old employer is

terminated;terminated; Commence with new employer within 3 Commence with new employer within 3

months; months; Performing substantially the same work; Performing substantially the same work; Transfer of assets or outsourcing Transfer of assets or outsourcing

arrangement between old and new arrangement between old and new employer or new employer is associated employer or new employer is associated entity. entity.

New South Wales systemNew South Wales system

Awards setting fair and reasonable Awards setting fair and reasonable conditions of employment for conditions of employment for employees: s 10.employees: s 10.

Enterprise agreements (s 31): Enterprise agreements (s 31):

(i) with industrial organisation; (i) with industrial organisation;

(ii) with employees directly. (ii) with employees directly. Conciliation and arbitration of Conciliation and arbitration of

industrial disputes (s130). industrial disputes (s130).

Inconsistency of federal Inconsistency of federal and state lawsand state laws

Direct inconsistency; Direct inconsistency; Cover the field; Cover the field; Commonwealth expressly excludes Commonwealth expressly excludes

the operation of certain State laws (s the operation of certain State laws (s 26); 26);

Modern awards or enterprise Modern awards or enterprise agreements prevail over State laws to agreements prevail over State laws to the extent of any inconsistency (s 29). the extent of any inconsistency (s 29).

Enforcement of awards and Enforcement of awards and enterprise agreementsenterprise agreements

The Federal Court or Federal Magistrates The Federal Court or Federal Magistrates Court may make any order the court considers Court may make any order the court considers appropriate, including injunction or appropriate, including injunction or compensation (s 545(1)); compensation (s 545(1));

An eligible State or Territory court may order An eligible State or Territory court may order employer to pay an amount payable under the employer to pay an amount payable under the Act or a fair work instrument (s 545(3)); Act or a fair work instrument (s 545(3));

Court may impose penalty of up to $6,600 (or Court may impose penalty of up to $6,600 (or $33,000 for a corporation) in case of breach of $33,000 for a corporation) in case of breach of the NES, a modern award, enterprise the NES, a modern award, enterprise agreement or workplace determination (s 546); agreement or workplace determination (s 546);