Maurice Blackburn - changes to the Fair Work Act

28 November 2012

Fair Work Amendment Bill 2012

The Fair Work Act Review Panel completed its review and delivered its report into the Fair Work Act in June 2012. On 30 October 2012, the Government introduced the Fair Work Amendment Bill 2012 (the Bill) into the Parliament as a first tranche response to the Report.

The Bill passed through the House of Representatives with no amendments on 31 October 2012.  The Senate referred it to the Senate Education, Employment and Workplace Relations Legislation Committee. The Committee is due to report on 26 November 2012.

The significant elements of the Bill are as follows:

Changes to Fair Work Australia

The Bill amends the FW Act to change the name of 'Fair Work Australia' to the 'Fair Work Commission'.

The Bill also provides for provide for the President of the FWC to deal with complaints about FWC Members. The President may temporarily restrict the duties of the FWC Member who has been the subject of a complaint.

Under the Bill the Governor-General may appoint an Acting Commissioner for a specified period where the Minister is satisfied that the appointment is necessary to enable the FWC to perform its functions effectively.

Unfair Dismissal and General Protections Applications

The Bill amends FW Act to extend the timeframe for lodging unfair dismissal applications from within 14 days of the dismissal taking effect to 21 days from the date of the dismissal

It also amends the FW Act to shorten the time limit for filing a General Protections Dispute Notice that involves a dismissal from 60 days to 21 days from the date of the dismissal.

The amendments now mean that any application regarding a dismissal must be made within 21 days.

The Bill inserts a new section 400A into the FW Act to enable the FWC to order costs against a party to an unfair dismissal matter if it is satisfied that the party caused the other party to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter. This is will capture a broad range of conduct, including a failure to discontinue an unfair dismissal application if it is settled, and a failure to agree to terms of settlement that could have led to the application being discontinued.

The amendment could have significant consequences if a member refuses to accept a reasonable offer of settlement and instructs a union to continue with their case. The costs order would be against the applicant which is usually the member hence, unions will have to be careful to advise their members when filing UFD applications of the potential to have costs ordered against them.

Enterprise Agreements and Enterprise Bargaining.

The Bill inserts new subsection 172(6) in the FW Act which provides that an enterprise agreement cannot be made with a single employee. 

The Bill also inserts a new subsection 176(3) in the FW Act. The effect of the amendment is that a union official cannot be a bargaining representative for an employee where the union is not itself entitled to represent the employee, even if the official is purporting to act in a private capacity rather than as an official of the employee organisation. 

Opt out clauses
Section 194 of the FW Act is amended to insert new paragraph 194(ba) which provides that a term of an enterprise agreement that would enable an employee or an employer to 'opt out' of coverage of the agreement is an unlawful term

The amendment is to apply to all enterprise agreements, whether they are made before or after the commencement of the amendment therefore, opt out terms in existing enterprise agreements will become unlawful terms that are of no effect.

However, the amendment it will not apply to a person who has elected to opt out of an enterprise agreement prior to the bill becoming law under an "opt out" provision in an existing agreement.

Scope Orders

Paragraph 238(3)(a) of the FW Act requires a bargaining representatives to notify all parties of their concerns before applying for a scope order. The Bill repeals the section and substitutes a new paragraph that relaxes the obligation requiring the bargaining representative to take all reasonable steps to notify the other relevant bargaining representatives of their concerns in writing.  The amendment is intended to facilitate the making of scope orders in cases where a bargaining representative is not able to notify all relevant bargaining representatives of its bargaining concerns despite reasonable efforts to do so. 

Protected Industrial Action

The Bill amends the FWA to clarify that voting for protected industrial action can be conducted electronically.

It  also clarifies that an employee will be eligible to be included on the roll of voters for a protected action ballot after the protected action ballot order was made, but before the close of the roll of voters providing the employee was otherwise eligible to vote in the protected action ballot (for example, because they are a new employee).

Default Superannuation Funds in Modern Awards

Most modern awards specify a default funds to which employers are required to make compulsory superannuation contributions. 

The Bill amends the FW Act to introduce a process under which the FWC will review the default funds in modern awards every 4 years, at the same time as the 4 yearly reviews of modern awards. The first such review will be conducted as soon as practicable after 1 January 2014.

Four yearly reviews are to be conducted by the FWC in 2 stages. In the first stage, the Expert Panel of the FWC must make and publish a 'Default Superannuation List.

In the second stage, a Full Bench of the FWC must review the default fund term in each modern award and ensure that each modern award specifies at least 2, but no more than 10, superannuation funds from those included on the 'Default Superannuation List'

Expert Panel

The Bill also amends the FW Act to provide for the constitution of an Expert Panel within the FWC to exercise certain functions in relation to the assessment of default superannuation funds for inclusion in modern awards and annual wage reviews. The Expert Panel will take over the functions currently performed by the Minimum Wage Panel. The Minimum Wage Panel will be disbanded.

Six Expert Panel Members will be appointed to the FWC on a part-time basis for a specified period not exceeding 5 years. The Expert Panel Members will be appointed by the Governor-General on the recommendation of the Minister. The Explanatory Memorandum to the Bill notes that Minimum Wage Panel Members will be invited to apply for appointment as an Expert Panel Member.

Modern Awards

The Bill inserts new paragraphs 160(2)(c) and (d) of  the FW Act. The amendment ensures that parties such as unions are able to bring an application to vary a modern award to remove an ambiguity or uncertainty under section 160 of the Act.  The amendment removes the uncertainty on this topic that currently exists.