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27 November 2007
The new federal government hopes to implement in full a new industrial relations system by 1 January 2010. In the meantime, the government intends to pass laws to allow a transition from the current system to the new system. Notably, the opportunities to make Australian Workplace Agreements will be reduced and eventually AWAs will be phased out altogether. This has implications for those employers who are contemplating AWAs or have existing AWAs within their business.
To move away from the current workplace laws, it will be necessary for the new government to secure transitional legislation. We expect that the government will introduce the proposed transitional laws to Parliament in February next year. However, much will turn on whether the Senate is prepared to pass the laws before the new Senate takes effect in July 2008. This article describes the laws on the assumption that they are passed.
According to pre-election policy announcements, the transitional period will run from early 2008 to 31 December 2009. The last day that an AWA can be registered under the current laws will be the day before the transitional laws take effect. The last possible nominal expiry date for AWAs made under current laws will be 31 December 2012. AWAs made under the current laws may only be terminated in accordance with the rules under the current laws.
Once the transitional laws take effect, it will not be possible to make further AWAs. However, there will be a new category of agreement know as Individual Transitional Employment Agreement. These agreements will be possible in some limited circumstances. If an employer has any employee engaged on an AWA as at 1 December 2007, that employer will be able to enter into an Individual Transitional Employment Agreement with a new employee or an existing employee if that employee is covered by an AWA. These arrangements will only apply during the transitional period. An Individual Transitional Employment Agreement cannot have a nominal expiry date beyond 31 December 2009. In addition, an Individual Transitional Employment Agreement must not disadvantage the employee when assessed against the relevant collective agreement or, if there is no collective agreement, the applicable award and the Fair Pay and Conditions Standard. Wages paid under AWAs and Individual Transitional Employment Agreements must reflect any adjustments to minimum wages during the transitional period.
If an AWA is terminated and the employer and employee have not made new arrangements, the employee will return to the award and the Fair Pay and Conditions Standard or a collective agreement applying at the workplace.
To date the draft legislation has not been released and so the outcomes may differ from those described here. Australian Business Lawyers will continue to provide updates on any changes and developments as soon as they occur.
If you have any queries, please do not hesitate to contact any of our workplace law partners, or your usual Australian Business Lawyers contact.
Tim Capelin
Managing Partner
Ph: 02 9458 7497
email: tim.capelin@ablawyers.com.au
Tony Vernier
Partner
Ph: 02 9458 7311
email: tony.vernier@ablawyers.com.au
John Stanton
Partner
Ph: 02 9458 7555
email: john.stanton@ablawyers.com.au
