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2002-2003-2004
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
WORKPLACE RELATIONS AMENDMENT
(PROTECTING SMALL BUSINESS EMPLOYMENT) BILL 2004
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for Employment and
Workplace Relations, the Hon Kevin Andrews MP)
OUTLINE
The Bill would amend the Workplace Relations Act
1996 (WR Act) to protect small business employers from redundancy payments
that would otherwise adversely impact on the capacity of small businesses to
provide employment.
On 26 March 2004, the Australian Industrial
Relations Commission (the Commission) handed down a test case decision
(PR032004) which determined that the exemption of businesses with fewer than 15
employees from redundancy pay obligations should be removed. The Commission
decided that the redundancy pay scale determined in 1984 for larger businesses
should now apply to small businesses. The scale ranges from 4 weeks’ pay
after one year of service to eight weeks’ pay after four years of service.
The Australian Government opposes any attempt to apply redundancy pay
obligations on employers who employ fewer than 15 employees. To achieve this,
the Bill:
• would amend paragraph 89A(2)(m) of the WR Act to limit
the allowability of redundancy pay to employers of 15 or more employees;
and
• provides that any variations to awards, made after the 26 March
2004 redundancy test case decision and imposing redundancy pay obligations on
employers who employ fewer than 15 employees, have no effect;
and
• excludes constitutional corporations which employ fewer than 15
employees from redundancy pay obligations which may be imposed by State laws or
State awards. However, the Bill will not remove redundancy pay obligations that
were imposed by a State law or State award before 26 March 2004.
The
Workplace Relations Amendment (Award Simplification) Bill 2002 presently before
Parliament also proposes an amendment to paragraph 89A(2)(m). The Bill proposes
amendments in four schedules to take account of all contingencies with respect
to the commencement of either or both of these Bills.
Schedule 1 –
would operate if this Act receives Royal Assent before the commencement of
Schedule 1 to the Workplace Relations Amendment (Award Simplification) Act
2004;
Schedule 2 – would operate if Schedule 1 to the Workplace
Relations Amendment (Award Simplification) Act 2004 commences before this
Act receives Royal Assent;
Schedule 3 – would operate where this Act
receives Royal Assent and then later Schedule 1 to the Workplace Relations
Amendment (Award Simplification) Act 2004 commences;
Schedule 4 –
provides any entitlement to a redundancy payment that arose before the
commencement of a Schedule to this Act is not affected.
FINANCIAL
IMPACT STATEMENT
The Bill has no financial impact on the Commonwealth
Budget.
NOTES ON CLAUSES
Clause 1 – Short
title
This is a formal provision specifying the short title of the
Act.
Clause 2 – Commencement
This clause specifies
when various provisions of the Act are proposed to commence. The effect of this
clause is that:
• Schedule 1 to the Act would come into operation
on the day the Act receives the Royal Assent but only if the Workplace
Relations Amendment (Award Simplification) Act 2004 does not commence
first.
• Schedule 2 to this Act would come into operation on the
day the Act receives the Royal Assent but only if the Workplace Relations
Amendment (Award Simplification) Act 2004 commences before this
Act.
• Schedule 3 to this Act would commence immediately after the
commencement of Schedule 1 to the Workplace Relations Amendment (Award
Simplification) Act 2004 but only if this Act commences first.
• Schedule 4 to this Act would come into operation on the day the
Act receives Royal Assent.
• Clauses 1 to 3 which would commence
on the day on which the Act receives Royal Assent.
Clause 3 –
Schedule(s)
Clause 3 provides that an Act specified in a Schedule to
this Act is amended or repealed as set out in the Schedule, and that any other
item in a Schedule operates according to its terms.
Workplace Relations Act 1996
Item 1 –
Paragraph 89A(2)(m)
1.1 This item would amend the WR Act to replace
existing paragraph 89A(2)(m).
1.2 Proposed paragraph 89A(2)(m) would make
redundancy pay by an employer of 15 or more employees an allowable award
matter.
1.3 This means that redundancy pay by an employer of fewer than
15 employees would not be an allowable award matter.
Item 2 –
Subsection 89A(7)
1.4 This item would amend the WR Act to omit
“Subsection (1)” from subsection 89A(7) and substitute it with
“Subject to subsection (7A), subsection (1)”.
1.5 This
amendment is consequential to item 3 which would insert proposed subsection
89A(7A).
Item 3 – After subsection 89A(7)
1.6 This
item would insert proposed subsection 89A(7A) to the WR Act.
1.7 Proposed
subsection 89A(7A) would have the effect that an exceptional matters order would
not be able to be made about redundancy pay by an employer of fewer than 15
employees.
Item 4 – After subsection 89A(8)
1.8 This
item would insert proposed subsection 89A(8A) to the WR Act.
1.9 Proposed
subsection 89A(8A) is an interpretative provision for proposed paragraph
89A(2)(m) and proposed subsection 89A(7A).
1.10 Proposed paragraph
89A(8A)(a) sets out the time – the relevant time – at which it is to
be worked out whether a particular employer employs 15 or more employees or
fewer than 15 employees for the purposes of paragraph 89A(2)(m) and subsection
89A(7A).
1.11 That time is either when notice of redundancy is given by
the employer or by the employee who becomes redundant, or when the redundancy
occurs, whichever happens first.
1.12 Proposed paragraph 89A(8A)(b)
provides that a reference to employees in either proposed paragraph 89A(2)(m) or
proposed subsection 89A(7A) includes a reference to the employee who becomes
redundant and any other employee who becomes redundant at the relevant time. A
reference to employees also includes any casual employee who, at the relevant
time, has been engaged by the employer on a regular and systematic basis for at
least 12 months, but does not include any other casual employee.
Item 5 – After section 153
1.13 This item would
amend the WR Act to insert proposed section 153A.
1.14 Proposed
subsection 153A(1) provides that a constitutional corporation which employs
fewer than 15 employees is not required to make redundancy payments to its
employees where a State law or State award would otherwise require the
constitutional corporation to make such payments.
1.15 Proposed paragraph
153A(2)(a) sets out the time – the relevant time – at which it is to
be worked out whether a particular corporation employs fewer than 15 employees
for the purposes of proposed subsection 153A(1) .
1.16 That time is
either when notice of redundancy is given by the corporation or by the employee
who becomes redundant, or when the redundancy occurs, whichever happens
first.
1.17 Proposed paragraph 153A(2)(b) provides that a reference to
employees in proposed subsection 153A(1) includes a reference to the employee
who becomes redundant and any other employee who becomes redundant at the
relevant time. A reference to employees also includes any casual employee who,
at the relevant time, has been engaged by the employer on a regular and
systematic basis for at least 12 months, but does not include any other casual
employee.
Item 6 – At the end of section
170FA
1.18 This item would amend section 170FA to include proposed
subsections 170FA(3) and (4).
1.19 Proposed subsection 170FA(3) provides
that the Commission must not make an order to give effect to Article 12 of the
Termination of Employment Convention in relation to the matter of redundancy pay
by an employer of fewer than 15 employees.
1.20 Proposed paragraph
170FA(4)(a) sets out the time – the relevant time – at which it is
to be worked out whether an employer employs fewer than 15 employees for the
purposes of subsection 170FA(3).
1.21 That time is either when notice of
redundancy is given by the employer or by the employee who becomes redundant, or
when the redundancy occurs, whichever happens first.
1.22 Proposed
paragraph 170FA(4)(b) provides that a reference to employees in proposed
subsection 170FA(3) includes a reference to the employee who becomes redundant
and any other employee who becomes redundant at the same time. A reference to
employees also includes any casual employee who, at the relevant time, has been
engaged by the employer on a regular and systematic basis for at least 12
months, but does not include any other casual employee.
Item 7
– Application
1.23 This item provides that the amendments
contained in items 1 to 4 of this Schedule would apply where the Commission
is:
• dealing with industrial disputes by arbitration;
and
• making an award or order about the prevention or settlement of
industrial disputes; and
• varying an award or order that would involve
maintaining the settlement of industrial disputes;
after the Schedule
commences whether the industrial dispute arose before or arises after the
Schedule has commenced.
1.24 This item also provides that the amendment
made by item 5 applies to:
• a State law or State award made after
the commencement of the Schedule that has the effect of imposing redundancy pay
obligations on constitutional corporations that employ fewer than 15 employees;
and
• a State law or State award made before or after the commencement
of the Schedule that is amended or varied after the commencement of Schedule and
has the effect of imposing redundancy pay obligations on constitutional
corporations that employ fewer than 15 employees.
1.25 This item also
provides that item 6 would apply where the Commission is making orders after the
Schedule commences.
Item 8 – Transitional – awards and
orders of the Commission
1.26 This item provides that if, during the
period from 26 March 2004 until this Schedule commences, the Commission made an
award or order that had the effect of requiring an employer of fewer than 15
employees to pay redundancy pay, or if the Commission varied an award or order
that was made before or during that period to that effect, then from the
commencement of this Schedule such an award or order ceases to have that
effect.
1.27 This item sets out the time – the relevant time
– at which it is to be worked out whether an employer employs fewer than
15 employees for the purpose of the transitional provisions.
1.28 That
time is either when notice of redundancy is given by the employer or by the
employee who becomes redundant, or when the redundancy occurs, whichever happens
first.
1.29 This item also provides that a reference to employees in the
transitional provision includes a reference to the employee who becomes
redundant and any other employee who becomes redundant at the relevant time. A
reference to employees also includes any casual employee who, at the relevant
time, has been engaged by the employer on a regular and systematic basis for at
least 12 months, but does not include any other casual employee.
Item 9 – Transitional – State laws and State
awards
1.30 This item deals with a State law or award that is made,
amended or varied during the period from 26 March 2004 until the Schedule
commences and which has the effect of requiring a constitutional corporation
employing 15 or fewer employees to pay redundancy pay. This item provides that
such a law or award ceases to have effect from the commencement of this
Schedule.
SCHEDULE 2 – AMENDMENT OF POST-AWARD SIMPLIFICATION LAW, WHERE THAT
LAW HAS ALREADY COMMENCED
Workplace Relations Act
1996
Item 1 –Paragraph 89A(2)(m)
2.1 This
item would amend the WR Act to replace the paragraph 89A(2)(m) which had been
inserted by Schedule 1 of the Workplace Relations Amendment (Award
Simplification) Act 2004 (the Award Simplification Act).
2.2 Proposed
paragraph 89A(2)(m) would make payments by an employer who employs 15 or more
employees in relation to a termination that is at the employer’s
initiative and on the grounds of operational requirements, an allowable award
matter.
2.3 This means that such payments by an employer of fewer than
15 employees is a not an allowable award matter.
Item 2 –
Subsection 89A(7)
2.13 This item would amend the WR Act to omit
“Subsection (1)” from subsection 89A(7) and substitute it with
“Subject to subsection (7A), subsection (1)”.
2.14 This
amendment is consequential to item 3 which would insert proposed subsection
89A(7A).
Item 3 – After subsection 89A(7)
2.6 This
item would insert proposed subsection 89A(7A) to the WR Act.
2.7 Proposed
subsection 89A(7A) would have the effect that an exceptional matters order would
not be able to be made about payments by an employer of fewer than 15 employees
in relation to a termination that is at the employer’s initiative and on
the grounds of operational requirements.
Item 4 – After
subsection 89A(8)
2.15 This item would insert proposed subsection
89A(8A) to the WR Act.
2.16 Proposed subsection 89A(8A) is an
interpretative provision for proposed paragraph 89A(2)(m) and proposed
subsection 89A(7A).
2.17 Proposed paragraph 89A(8A)(a) sets out the time
– the relevant time – at which it is to be worked out whether a
particular employer employs 15 or more employees or fewer than 15 employees for
the purposes of paragraph 89A(2)(m) and subsection 89A(7A).
2.18 That
time is either when notice of the termination is given by the employer, or when
the termination occurs, whichever happens first.
2.19 Proposed paragraph
89A(8A)(b) provides that a reference to employees in either proposed paragraph
89A(2)(m) or proposed subsection 89A(7A) includes a reference to the employee
who is terminated and any other employee who is terminated at the relevant time.
A reference to employees also includes any casual employee who, at the relevant
time, has been engaged by the employer on a regular and systematic basis for at
least 12 months, but does not include any other casual employee.
Item 5 – After section 153
2.20 This item would
amend the WR Act to insert proposed section 153A.
2.21 Proposed
subsection 153A(1) provides that a constitutional corporation which employs
fewer than 15 employees is not required to make redundancy payments to its
employees where a State law or State award would otherwise require the
constitutional corporation to make such payments.
2.22 Proposed paragraph
153A(2)(a) sets out the time – the relevant time – at which it is to
be worked out whether a particular corporation employs fewer than 15 employees
for the purposes of proposed subsection 153A(1).
2.23 That time is either
when notice of redundancy is given by the corporation or by the employee who
becomes redundant, or when the redundancy occurs, whichever happens
first.
2.24 Proposed paragraph 153A(2)(b) provides that a reference to
employees in proposed subsection 153A(1) includes a reference to the employee
who becomes redundant and any other employee who becomes redundant at the
relevant time. A reference to employees also includes any casual employee who,
at the relevant time, has been engaged by the corporation on a regular and
systematic basis for at least 12 months, but does not include any other casual
employee.
Item 6 – At the end of section
170FA
2.25 This item would amend section 170FA to include proposed
subsections 170FA(3) and (4).
2.26 Proposed subsection 170FA(3) provides
that the Commission must not make an order to give effect to Article 12 of the
Termination of Employment Convention in relation to the matter of redundancy pay
by an employer of fewer than 15 employees.
2.27 Proposed paragraph
170FA(4)(a) sets out the time – the relevant time – at which it is
to be worked out whether an employer employs fewer than 15 employees for the
purposes of subsection 170FA(3).
2.28 That time is either when
notice of redundancy is given by the employer or by the employee who becomes
redundant, or when the redundancy occurs, whichever happens
first.
2.29 Proposed paragraph 170FA(4)(b) provides that a reference to
employees in proposed subsection 170FA(3) includes a reference to the employee
who becomes redundant and any other employee who becomes redundant at the
relevant time. A reference to employees also includes a reference to any casual
employee who, at the relevant time, has been engaged by the employer on a
regular and systematic basis for at least 12 months, but does not include any
other casual employee.
Item 7 – Application
2.30 This item provides that the amendments contained in items 1 to
4 of this Schedule apply where the Commission is:
• dealing with
industrial disputes by arbitration; and
• making an award or order
about the prevention or settlement of industrial disputes; and
• is
varying an award or order that would involve maintaining the settlement of
industrial disputes;
after the Schedule commences whether the industrial
dispute arose before or arises after the Schedule has
commenced.
2.31 This item also provides that the amendment made by item 5
applies to:
• a State law or State award made after the
commencement of the Schedule that has the effect of imposing redundancy pay
obligations on constitutional corporations that employ fewer than 15 employees;
and
• a State law or State award made before or after the commencement
of the Schedule that is amended or varied after the commencement of Schedule and
has the effect of imposing redundancy pay obligations on constitutional
corporations that employ fewer than 15 employees.
2.32 This item also
provides that item 6 applies where the Commission is making orders after the
Schedule commences.
Item 8 – Transitional – awards and
orders of the Commission: period from 26 March until commencement of award
simplification amendments
2.33 This item provides that if during the
period from 26 March 2004 until the Award Simplification Act commences, the
Commission made an award or order that had the effect of requiring an employer
of fewer than 15 employees to pay redundancy pay, or varied an award or order
that was made before or during that period to that effect, then from the
commencement of this Schedule such an award or order ceases to have that
effect.
2.34 This item sets out the time – the relevant time
– at which it is to be worked out whether employer employs fewer than 15
employees for the purposes of this transitional provision.
2.35 That time
is either when notice of redundancy is given by the employer or by the employee
who becomes redundant, or when the redundancy occurs, whichever happens
first.
2.36 This item also provides that a reference to employees in this
transitional provision includes a reference to the employee who becomes
redundant and any other employee who becomes redundant at the relevant time. A
reference to employees also includes a reference to any casual employee who, at
the relevant time, has been engaged by the employer on a regular and systematic
basis for at least 12 months, but does not include any other casual employee.
Item 9 – Transitional – awards and orders of the
Commission: period from commencement of award simplification amendments until
commencement of this Schedule
2.37 This item provides that if during
the period from the commencement of the Award Simplification Act until the
commencement of this Schedule, the Commission made an award or order that had
the effect of requiring payments by an employer of fewer than 15 employees in
relation to a termination that is at the employer’s initiative and on the
grounds of operational requirements or varied an award or order that was made
before or during that period to that effect, then from the commencement of this
Schedule such an award or order ceases to have that effect.
2.38 This
item sets out the time – the relevant time – at which it is to be
worked out whether employer employs fewer than 15 employees for the purposes of
this transitional provision.
2.39 That time is either when notice of
termination is given by the employer or when the termination occurs, whichever
happens first.
2.40 This item also provides that a reference to employees
in this transitional provision includes a reference to the employee whose
employment is terminated and any other employee whose employment is terminated
at the relevant time. A reference to employees also includes a reference to any
casual employee who, at the relevant time, has been engaged by the employer on a
regular and systematic basis for at least 12 months, but does not include any
other casual employee.
Item 10 – State laws and State
awards
2.41 This item deals with a State law or award that is made,
amended or varied during the period from 26 March 2004 until the
Schedule commences and which has the effect of requiring a constitutional
corporation employing 15 or fewer employees to pay redundancy pay. This item
provides that such a law or award ceases to have effect from the commencement of
this Schedule.
SCHEDULE 3 – AMENDMENT OF POST-AWARD SIMPLIFICATION LAW, WHERE THAT
LAW HAS YET TO COMMENCE
Workplace Relations Act
1996
Item 1 – Paragraph 89A(2)(m)
3.11 This
item would amend the WR Act to replace paragraph 89A(2)(m) that had been
inserted by Schedule 1 of this Act.
3.12 Proposed paragraph 89A(2)(m)
would make payments by an employer who employs 15 or more employees in relation
to a termination that is at the employer’s initiative and on the grounds
of operational requirements an allowable award matter.
3.13 This means
that such payments by an employer of fewer than 15 employees would not be an
allowable award matter.
Item 2 – Subsection
89A(7A)
3.11 This item would insert proposed subsection 89A(7A) to
the WR Act to replace subsection 89A(7A) that had been inserted by Schedule 1 of
this Act.
3.12 Proposed subsection 89A(7A) would have the effect that an
exceptional matters order would not be able to be made about payments by an
employer of fewer than 15 employees in relation to a termination that is at the
employer’s initiative and on the grounds of operational
requirements.
Item 3 –Subsection 89A(8A)
3.11 This
item would insert proposed subsection 89A(8A) to the WR Act to replace
subsection 89A(8A) that had been inserted by Schedule 1 of this
Act.
3.12 Proposed subsection 89A(8A) is an interpretative provision for
proposed paragraph 89A(2)(m) and proposed subsection
89A(7A).
3.13 Proposed paragraph 89A(8A)(a) sets out the time – the
relevant time – at which it is to be worked out whether a particular
employer employs 15 or more employees or fewer than 15 employees for the
purposes of paragraph 89A(2)(m) and subsection 89A(7A).
3.14 That time is
either when notice of the termination is given by the employer, or when the
termination occurs, whichever happens first.
3.15 Proposed paragraph
89A(8A)(b) provides that a reference to employees in either proposed paragraph
89A(2)(m) or proposed subsection 89A(7A) includes a reference to the employee
who is terminated and any other employee who is terminated at the relevant time.
A reference to employees also includes a reference to any casual employee who,
at the relevant time, has been engaged by the employer on a regular and
systematic basis for at least 12 months, but does not include any other casual
employee.
Item 4 – Application
3.11 This item
inserts application provisions that are to the same effect as the Award
Simplification Act.
3.12 This item proposes that the amendments made by
items 1 to 3 of this Schedule would apply in relation to an industrial dispute
that the Commission began to deal with before the commencement of the Schedule,
or begins to deal with after commencement of the Schedule.
SCHEDULE 4 – PROTECTION OF EXISTING
ENTITLEMENTS
Item 1 – Protection of existing
entitlements
4.1 This item ensures that nothing in a Schedule to the
Act or an amendment made by a Schedule to the Act would effect any entitlement
to a redundancy or termination payment that had arisen before the commencement
of that Schedule.
4.2 This means that if a person had been made
redundant or had been terminated at the employer’s initiative and on the
grounds of operational requirements and had therefore become entitled to a
payment before the relevant Schedule to the Act commenced, then the entitlement
to that payment is not affected.