|
On 4 July 2007, the Minister for Employment
and Workplace Relations, The Hon. Joe Hockey MP,
released the Workplace Relations Fact Sheet following
the introduction of the Fairness Test under the Workplace
Relations Amendment (A Stronger Safety Net) Act,
2007 on 28 June 2007.
The Fact Sheet contains information
on employee entitlements, including the Australian
Fair Pay and Conditions Standard, support services
and basic protections for working Australians. It
also provides an overview of the Fairness Test.
The Fairness Test
The Fairness Test applies to all workplace
agreements and variations to workplace agreements
lodged on or after 7 May 2007 that remove or change
certain protected conditions.
The Government’s stated intent
behind the Fairness Test is to deal with reports
that a great majority of workplace agreements lodged
since the WorkChoices reforms, have removed or modified
the “protected award conditions” described
in the Workplace Relations Act, 2006.
The Fairness Test aims to ensure that
employees receive fair compensation if their Australian
Workplace Agreement (AWA) or collective
agreement removes or modifies protected conditions,
such as:
- penalty rates including working
on public holidays and weekends;
- shift and overtime loadings;
- monetary allowances;
- annual leave loadings;
- public holidays;
- rest breaks;
- incentive-based payments; and
- bonuses.
The Fairness Test only applies to AWAs
for people earning less than $75,000 or more per
year.
How will the Fairness Test be applied?
The Fairness Test will involve an assessment
by the Workplace Authority as to whether a workplace
agreement modifies or removes any or all of an employee’s
previously protected award conditions and, if so,
whether the employee is fairly compensated.
In establishing what is “fair
compensation”, the Workplace Authority will
take into account:
- monetary and non-monetary compensation;
and
- work obligations of the employee(s),
such as shift or weekend work.
The Workplace Authority may also consider
the personal circumstances of the employee(s), including
their family responsibilities. In exceptional circumstances
the Workplace Authority may also consider other factors,
specifically the industry, location and economic
circumstances of the employer or the employment circumstances
of the employee(s).
If an agreement does not pass the Fairness
Test, the employer and employee(s) will be notified
in writing. The employer and employee(s) will have
14 days to vary the workplace agreement so that it
fairly compensates the employee(s) and the employer
will have an obligation to pay any back-pay. If they
do not do so the agreement will be void.
What this means for employers
Employers that wish to have employees
on workplace agreements will now need to comply with
the fairness test. This will require an analysis
of whether the removal of protected award conditions
have been traded for fair compensation in return.
This will not always be a simple analysis depending
upon the type of work involved.
Furthermore all employers will be required to provide the fact sheet as set
above from 20 July 2007 onwards.
For new employees,
they must receive it within 7 days
of commencing work. For current employees,
the Fact Sheet must be provided by 20 October
2007.
A copy of the Fact Sheet can be downloaded
by clicking here or accessed via the Workplace
Authority website www.workplaceauthority.gov.au
To find out more about these changes
or discuss the implementation of these changes to
your business, please contact Andrew Bland at abland@blandslaw.com.au.
|
