The Implications of the Fair Work Act 2009 Report

Executive summary

The implications of the Fair Work Act 2009 have changed the industrial relationship legislation and created the prospect of changing to the technique of managers working, role of employees and employers and the unions engage. The contemporary research suggests that the latest changes to the Australian Industrial Relationship legislation have endowed with an assortment of opportunities for organisations to adjust their relationship with the unions as well as employees with a variety of scopes that may support the employers to be benefited for having an union’s presence at their workplace. This paper explores the factors influencing the implications of the Fair Work Act and to do so this paper has scrutinised the overview of fair work act 2009, view of the minister, view of the opposition. It also investigated the implications of the fair work act for the state, employees, employers, unions, managers, Australian society as a whole under the recessionary economy.

Key Changes

The plan of the government was to change the industrial relations and multiple workplace relations systems in Australia by replacing the Workplace Relations Act 1996. The Fair Work Act 2009 brings these changes because the previous system had overlapped with the state workplace relations regulation and created extreme levels of uncertainty as well as legal complexity –

• Private sector: This provisions of this Act had covered about 80.5% of all Australian non-managerial private sector employees (House of Representatives, 2009);
• NES: Introduction of National Employment Standards is one of the importance issues in this Act;
• New Institutional Regime: Establishment of Fair Work Australia and the Fair Work Ombudsman (Justitia, 2009)

Minister

According to the view of Workplace Relations Minister Julia Gillard, this Act will remove all the problems of Workplace Relations Act 1996 and other Acts, for example, the previous system of litigation was costly for business, unions, and governments to navigate legal complexity and obey the requirement of the process (Cooper, 2009). She further added that the Fair Work Act would also be able to coordinate the Separate workplace relations systems as the Government has carefully monitored the inconsistency of multiple workplace relations systems.

However, the aim of the government was to introduce a National Workplace Relations System to minimise the financial costs of litigation process, to balance flexibility and equality issues and to remove uncertainty. However, the entire paper will reflect the view of the government through the overall discussion of the act.

The oppositions

At the early stage before implementation in 2008 the Rudd Government of Australia didn’t shown any awareness to amend the Fair Work Bill, the Independent Contractors of Australia (ICA) requested the federal opposition parties to extend their support to bring necessary changes in the Fair Work Bill. The oppositions under the leadership of Senator Eric Abetz concentrated their attention on the issue, deliberated some study in this regards, extended their support to ICA, and argued his strong logical views that were discussed in the parliament and mass Medias. The Senator Abetz pointed out the amendment issue as a well-built case in favour of the defence for the independent contractors with the satisfied relevance to the principles and guidance of the International Labour Organisation (ILO) and the major debates are deliberated as follows-

Senator Abetz has uphold this imperative matter of the federal oppositions has demonstrated as an obvious understanding to the ILO guidance and principles as well as how it should be useful within the legislative exercise in Australia for strictly defending the rights of the self employed workforces who are treated as independent contractors in Australia.

The self-employed workforces who are familiar as independent contractors in Australia are let down and become frustrated that their positions are not integrated in the Fair Work Bill on the basis of the actions of the Deputy Leader of parliament while ICA demonstrated enough strong logic to wait for that incorporation. The federal oppositions supported the ICA to remain powerfully devoted to its logical position and to continue working with the both Government and opposition political parties within the parliamentary framework to convince for apposite amendments of the Fair Work Bill to accomplish the globally standard objectives as a union category (ICA, 2009).

The implications of the Fair Work Act

Under the federal legislation materialisation drives the Fair Work Act 2009 of Australia has seen the light of complete implications from first January 2010 in the private sectors of South Australian and Victoria along with the non-government social services sectors, agencies those are not singly incorporated including private educational institutions. This section of the report would argue with the changes and impacts carried out by the implications of the Fair Work Act 2009 for following issues-

State

• Jurisdiction: the Fair Work Act 2009 has significant impact on jurisdiction because it clearly mentioned that Victoria has already implemented this act;
• Private sector: only 1.6% of non-managerial private zone employees are absolutely covered by State workplace relations systems;
• Transitional arrangements: Due to the replacement of 1,700 federal and state-based awards by the 122 modern awards, the salary provisions would be comparable among States though it may vary (Stewart, 2009).

Employers

The provisions of FWA 2009 has changed industrial relationship and the environment of the workplace, such as, the employer will be liable under this act if he denied a promotion of any employee because he/she made a real complaint or grievance against the employer. There are many specific provisions, which may influence the workplace relationship, such as –

• Working hour: The government has fixed thirty eight hours minimum working hour for a week with extra hours, consequently, this act has reduced the bargaining power of employers;
• Annual leave: At this moment, employers are bound to allow at least one month leave to full time employees and pro rata amount to part time workers;
• Community service leave: in addition, employers have to permit unpaid leaves if a worker asked leave with reasonable notice under this category, for instance, an employee may call for jury service or other voluntary crisis management action.
• Public holidays: Employers has limited power to call the employees for work in public holidays and they are entitled to get modernised award;
• Termination Notice: According to FWA 2009, employers have to give prior written notice to terminate any employee from the job (Thompson, 2009);
• Redundancy: this is one of the important aspects as it includes several new provisions both for employers and employees like – it added the term ‘Genuine Redundancy’ that means an employer will not be legally responsible under unfair dismissal for real redundancy (Delaney, 2010);
• Other: Modern awards system, enterprise agreements, good faith bargaining, protected industrial action, minimum range of salaries, transfer of business and assurance of annual earnings are the major points those have either negative or positive impact on the employers as well as employees (AIG, 2009).

Employees

• Bargaining power: According to the general rule, it is essential to have an enterprise agreement between an employer and employees of that organization and both parties will negotiate to create this agreement. However, the problems arise when the employers refuse to negotiate and lapse ninety days deadline for renew, then the representative of the employees can complain against the employer to Fair Work Australia to settle on the issues by considering majority support as it has the authority to make orders for severe breach of this Act (AHA, 2009);
• Right of entry: This right will help the employees as the union still hold the power to entry and this act adds few conditions like unions must notify 24 hours before visits, explain the particular reason to visit and so on.
• Industrial action: The employees have no right to ask salary for the strike period and Fair Work Australia has authority to prevent them from industrial action;
• Safeguard from unfair dismissal: This law offers many provisions for bringing claim in this sector, such as, employees of a small business will be competent to make an allegation under this Act if they comply the criteria to serve the minimum employment period (Australian Government, 2009);
• Balance between work and family life: Now an employee will be able to ask different start and finish times because the Fair Work Act 2009 provides numerous provisions to coordinate the professional as well as family life, for example, modern awards and enterprise agreements give flexibility, NES increases the amount of unpaid parental leave, and reduces workplace discrimination.

Union

The implications of the Fair Work Act from the perspective of unions, the Union of Employers of Master Builders has added that the industrial matter underneath the FWA ought to integrate some degree of to those issues that would be appropriate to the employment relationships while it has dealt with only three controversial provisions enclosed in the union’s bargaining agreement. The most controversial provisions that Fair Work Act dealt with are as-

• The union bargaining agent’s fees involved in the FWA has drawn attention of the concerned communities and argued to ban under the Act while it was a long decade practice under the federal and sate law.
• Limiting engagement of Subcontractors is also a dilemma under the FWA while the union bargaining agent’s fee has treated as an industrial matter intended for the rationales of the Act although the Agreement article necessities the principal contractor would only be capable to appoint sub-contractors under the union enterprise agreement. On the other hand, the previous law has the provision to engaging sub-contractor by the employer may conflict the provision of the FWA to determining how the second sub-contractors pay or terminate.
• It is not clear in the Fair Work Act whether the Payment of Union Dues would be considered as an industrial matter or not, thus there is a scope for any beneficiary to go to the higher court for direction, to overcome this challenge it is essential to amend the act keeping such provision of defining industrial relationship (Baker, 2009).
• The Fair Work Act has generated the union right of entry that brings obligations for unions, union leaders as well as employers though the employers argue the union right of entry terms as problematic and treat as a vexed issue but the workers have huge support in this regards. Most of the workers unions supported this provision and added that the union officials would be empowered to keep the interest of working class (Juris, 2009).
• Limiting the Union Leaders is also an adventurous provision of FWA, while in the previous system any state union leader who simultaneously keeps a right of entry permit of a federal union that Fair Work Act would abolish this provision. An Union leader may keep any one of the position, if he goes for federal right of entry, the state union right of entry permit would be automatically suspended under FWA
• The secret ballots before strike action is an admirable step for FWA to incorporate democratic practice in the decision making process of Union activity while the decision of strike by a few leaders generates anarchy in the workplace;
• Anti-Strike Pay Provisions under Fair Work Act is also a significant matter in the industrial relation that increase productivity (Department of Commerce, 2009).
• Moreover, Fair Work Act has introduced the mechanism to put a stop to the union leaders abusing the union right of entry provisions for commencing the meetings at the time of work but directed to do so at non working hours without hampering the production.

Hannan (2010, 4) has reported in The Wall Street Journal that Different trade Unions have demonstrated different views on the implication of Fair Work Act while the implications of FWA called over by the business concerns as a landmark ruling that pertain to various workplace agreements that permitted to volunteer to work ahead of the standard 38 hours weekly. The national secretary of the Australian Workers Union Mr. Paul Howes has demonstrated a negative attitude to the implications of FWA and added that the union supposed the decision failed to pass the Fair Work Act to prove its better outcomes test and evidently disadvantages the employees whilst weighted against the award for the industry. Nevertheless, the NRA ¹ has demonstrated positive endorsement mentioning that it should restores several faiths by employers upon a system that never Australia evidenced ever before FWA to fostering inflexibility and keeps the interests of both employees and employers while the workers struggled for many years campaigning to execute weekly for 38-hour working.

Managers

The Fair Work Act has contributed the Industrial Relations of Australian companies in a new dimension and changed the form of negotiation including terms and conditions of employment for the industries, enterprises as well as individual level which is essential for the managers to coup up with the new system. Legislative change or an introduction of new regulation is not a very easy matter for the corporate or HR managers to become familiar for practice without any orientation but the managers are the vital segment of the business communities who have to bring into practice the new legislation more than employees and top management.

Under the FWA, the managers have vital role to mitigate public debates regarding unionisation and de-unionisation and the new legislative framework has deliberated a greater opportunity for Human Resource managers to manage agreements of workplaces working with union and individuals. Under the present business environment, the companies compete with each other to increase and achieve more market share and the success of these companies mostly depends on the trust of employees that can generate by the managers.

Capelin (2010, 1) pointed out that though the implications of Fair Work Act evidenced an experience of one year, it is gust going through a breeding stages ever since it has handled the industrial relations in every level of Australia but the manages of many companies are still struggling to become familiar with the changes carried out by FWA. However, the federal legislators and academies considered that the people ready to uphold the new legislation but the reality is that there are huge areas where the managers are still confused. Following diagram demonstrates the areas those the managers needed to understand to handle industrial relationships matters-

The most privileged expanse for managers is to understand is the old areas where FWA brings changes for Awards far away from commitments of no new category of employees would come under the coverage of award as the award coverage has expanded to large extent. For instance, in the finance industry the award coverage has incorporated for the HR managers including the full assortment of mid-level managers of banking sector and large insurance companies but for small players of financial sector faced huge dilemmas.

Subsequently, the managers needed to comprehend with techniques that enterprise agreements have negotiated and transformed together with the perimeters of union activities to workplace including the modified right to bargain. The philosophy at the back of the legislation was to fit with the workplace that assists the managers to take course of action while a problem occurs among the employers and employees and to mitigate the concerned the parties under FWA.

Another discloser for managers is the insight on the National Employment Standards (NES) where the managers would handle the minimum standards of wage together with the right to appeal flexible work arrangements including medical, insurance, and parental leave and so on.

Society

The Fair Work Act has come into implications under the global financial downturn though Australia has not seriously affected by the recessionary impact but there were tremendous influence in the national economy and the government was much more aware to protect its success in poverty irradiation and progress en routed for sustainable return to growth.

Gillard addressed that the choice to follow the FWA by creating an observation centre to gathering research, facilitating the teaching for the management practitioners and providing cross-sector partnerships among the public and private to engender positive social impact at the crossroads among the government, business entries and life style of the communities (Gillard 2010, 1). In this context the implications of FWA has a long term social impact

There are some social organisations active with the implications of FWA such as Cisco as a prime supporter Fair Work Act has reported that the event would contribute the social progression of Australia and pointed that the present government of Rudd has enormous awareness for social innovation exchange by providing top priorities on relation to social enclosure under the Act.

It is notable that the responsibilities of some Ministers have included workplace relation while the Work Choices concern has shaped outstandingly in the Parliament, the course action motivating to the preface nation’s forward looking, and fairness legislation that has already passed with mixed impression. Within the implications of FWA, most populace in fact sought for social inclusion as a morally essential part of Australia is a well-brought-up society and this is why social innovation matters for the implications of the Act.

Recommendations

Fair Work Act has come into implication with the objectives to introduce a unified national legislation for all the states, which has already obstructed due to some states as if West Australia refused to integrate this legislation in their state. It has evidenced serious barrier to implement the federal dream laid behind the initiative, thus this paper would go for following recommendations-.

• The employers need adequate training to implement this law in their regular practice as they are not expert on the new terms and conditions;
• This Act should subject to appeal as it provides many options, which need to scrutinize and amend accordingly under the continues implementation process to reach the ultimate objectives of the legislation;
• Still not all states implement the FWA 2009 as their own legislation. Therefore, the introduction of new institution for a National Workplace Relations System brings no fruitful result if the employers transfer their business;

Conclusion

From the above discussion, it is clear that the intention of the government was to centralise the entire system to minimise the cost of litigation but the implementations of this act is a great challenge for the employers, employees, states, unions, managers and the society as a whole to gaining the ultimate objectives of the federal legislation.

Reference List

AHA. 2009. Collective Bargaining Framework. Web.

AIG. 2009. “Fair Work Act Passed by Parliament,” The Australian Industry Group. Web.

Australian Government. 2009. The Fair Work Act 2009 – An overview. Web.

Baker, Timothy B. 2009. “Towards a new employment relationship model: Aligning the changing needs of individual and organisation” Leadership & Organisation Development Journal, Vol. 30, Issue- 3, 198 – 223.

Capelin, Tim. 2010. Confusion still reins over Fair Work Act. Web.

Cooper, Hayden. 2009. “Fair Work Bill designed for economic flexibility: Gillard,” ABC News. Web.

Delaney, Chris. 2010. The Fair Work Act 2009 – Implications For Employers. Web.

Department of Commerce. 2009. Submission on the Review of the State Industrial Relations System. Web.

Gillard, Julia. 2008. Social Innovation, Social Impact: A new Australian Agenda. Web.

Hannan, Ewin. 2010. “Unions to appeal 38-hour ruling.” The Wall Street Journal. Web.

House of Representatives. 2009. Fair Work Act 2009: An Act relating to workplace relations, and for related purposes. Web.

ICA. 2009. Statement Fair Work Act. Web.

Juris, Perth B. 2009. “Explaining aspects of the Fair Work Act 2009,” Australian Human Resources Institute – Human Resources and Industrial Relations Special Interest Group (WA). Web.

Justitia. 2009. “Fair Work Act 2009 – Update,” Justitia Update. Web.

Stewart, Andrew. 2009. “Extending the Fair Work Act: The New National System,” Federation Press, NSW. Web.

Thompson, David and Costa Brehas. 2009. “Unfair dismissal under the Fair Work Act,” Hunt & Hunt Employment Update. Web.

Footnotes

1. National Retail Association