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Changes to WorkPlace Agreements Effective
7th May
The Federal Government announced on
Friday some significant changes to the WorkChoices
legislation.
A brief summary of the changes are
- An introduction of a “fairness
test” for award based employees that earn
less that $75 000 per year
- In the case of a collective agreement,
the fairness test will automatically apply to industries
that are covered by an award.
- If an AWA or Collective agreement
removes or modifies certain Protected Award conditions
the employee is entitled to “fair compensation”.
- Protected award conditions are Penalty
rates, shift and overtime loadings, monetary allowances,
annual leave loading, public holidays, rest breaks
and incentive based payments and bonuses
- The Fairness test will examine
monetary or non-monetary compensation offered relative
to what would have been payable under the relevant
award. For example a higher rate of pay may be
offered to offset removal of certain protected
award conditions
- Fair Compensation - matters to
be taken into account may be work obligations,
industry, location, economic circumstances of the
business and the specific circumstances of the
employee. All arrangements and entitlements shall
be taken into account in deciding this issue
- The changes will take effect for
all workplace agreements lodged on or after 7 May
2007. All existing workplace agreements at that
date will not be subject to the changes
What this means for employers
- Employers considering introducing
AWAs or collective agreements will now need to
comply with these changes.
- Employers will need to show that
they are providing some benefit to the employee
to offset the removal of these protected award
conditions. There is no detail at present that
defines what that may be but may either be monetary
or non monetary compensation. For example, an arrangement
to allow flexible working hours might be viewed
as a form of compensation
- Employers who do not comply
may be subject to back pay claims from the date
of the agreement.
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