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FAIR WORK LEGISLATION AMENDMENT REGULATIONS 2009 (NO. 3) (SLI NO 391 OF 2009)
EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 391
Issued by the authority of the Minister for Employment and Workplace Relations
Fair Work Act 2009
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Fair Work Legislation Amendment Regulations 2009 (No. 3)
Subsection 796(1) of the Fair Work Act 2009 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.
Section 4 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Transitional Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Transitional Act.
The Fair Work Amendment (State Referrals and Other Measures) Act 2009 (Referral Act) amends the Act to enable States to refer workplace relations matters to the Commonwealth for the purposes of paragraph 51(xxxvii) of the Constitution with effect from 1 January 2010 (the Division 2B referral commencement). The Referral Act also amends the Transitional Act to establish arrangements for employees and employers transitioning from referring State systems to the national workplace relations system.
Paragraph 7(1)(c) of Schedule 2 to the Transitional Act provides that the Governor-General may make regulations to facilitate the transition from the regime provided for by State industrial laws of Division 2B referring States to the regime provided for by the Act and Transitional Act. Item 8 of Schedule 2 to the Transitional Act provides that the Governor‑General may make regulations to modify provisions of the transitional schedules in the Act.
The Regulations contain two Schedules.
Schedule 1 to the Regulations amends the Fair Work Regulations 2009 (Fair Work Regulations) to:
Schedule 2 to the Regulations amends the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (Transitional Regulations) to give effect to transitional arrangements for State references. The proposed amendments:
The Regulations supplement and complete the transitional arrangements contained in the Referral Act. The Regulations also give effect to commitments made by the Australian Government as part of consultations with the States over references of power. The repeal of regulations 1.05 and 3.10 and the amendment of regulation 1.15A of the Fair Work Regulations (contained in Schedule 1 to the Regulations) are examples of this.
The Queensland Government was consulted on the development of amendments set out in Schedule 2 of the Regulations concerning the matters agreed between it and the Government in the context of negotiations over the referral.
The amendments in Schedule 2 that deal with the modified application of the better off overall test for enterprise agreements essentially replicate measures in the Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2009 (No. 1) (SLI 2009 No. 335) that were the subject of previous consultation with key stakeholders.
Details of the Regulations are in the Attachment.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on 1 January 2010.
ATTACHMENT
Details of the proposed Fair Work Legislation Amendment Regulations 2009 (No. 3)
This regulation sets out the name of the Regulations as the Fair Work Legislation Amendment Regulations 2009 (No. 3).
This regulation provides that the Regulations commence on 1 January 2010.
This regulation provides that the Fair Work Regulations 2009 (Fair Work Regulations), as amended by the Fair Work Legislation Amendment Regulations 2009 (No. 2), are amended in accordance with Schedule 1.
This regulation provides that Schedule 2 to the Regulations amends the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (Transitional Regulations) in accordance with Schedule 2, as amended by the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (No. 1), the Fair Work Legislation Amendment Regulations 2009 (No. 1) and the Fair Work Legislation Amendment Regulations 2009 (No. 2).
Schedule 1 – Amendments of Fair Work Regulations 2009
Item [1] – Regulation 1.05
This item repeals regulation 1.05 of the Fair Work Regulations following an amendment to the Fair Work Act 2009 (the Act) that has the same effect as this regulation.
Regulation 1.05 of the Fair Work Regulations modifies the definition of eligible State or Territory court in section 12 of the Act to include the Industrial Court of New South Wales.
The Fair Work Amendment (State Referrals and Other Measures) Act 2009 (Referral Act) amended section 12 of the Act to include the Industrial Court of New South Wales in the definition of eligible State or Territory court on the face of the legislation.
When this amendment commences on 1 January 2010, regulation 1.05 of the Fair Work Regulations will no longer be required.
Item [2] – Regulation 1.15A
This item amends regulation 1.15A of the Fair Work Regulations to reflect amendments to the definition of State public sector employer in Division 2A of Part 1‑3 of the Act.
Division 2A of Part 1-3 of the Act gave effect to Victoria’s reference of workplace relations matters to the Commonwealth. Under Division 2A a referring State can exclude from its reference matters relating to State public sector employers. Victoria excluded certain matters relating to Victorian public sector employers and employees, which are set out in section 5 of the Fair Work (Commonwealth Powers) Act 2009 (Vic) (the Victorian Referral Act).
Section 30A of the Act sets out the definition of State public sector employer. Paragraph 30A(d) of the previous definition enabled the regulations to prescribe certain employers as State public sector employers. Regulation 1.15A of the Fair Work Regulations is expressed to be made under paragraph 30A(d) of the definition and prescribes employers that are public sector entities within the meaning of the Public Administration Act 2004 (Vic) that are otherwise outside the definition of State public sector employer in section 30A.
The Referral Act amended the definition of State public sector employer in section 30A to include a person who employs individuals on behalf of an unincorporated public sector body. This amendment moved the regulation-making power from paragraph (d) of the definition to paragraph 30A(e).
Consistent with this change, this item amends regulation 1.15A so that it refers to paragraph (e) of the amended definition of State public sector employer in section 30A.
Item [3] – Chapter 3, Part 3-3, Division 6
This item repeals Division 6 of Part 3-3 of Chapter 3 of the Fair Work Regulations, which contains only regulation 3.10, following an amendment to the Act that has the same effect as this regulation.
Regulation 3.10 of the Fair Work Regulations prescribes a Minister of a referring State or of a Territory with portfolio responsibility for workplace relations as a person who has standing to apply to Fair Work Australia (FWA) for an order suspending or terminating protected industrial action for a proposed enterprise agreement if the industrial action is being engaged in, threatened, impending or probable in the relevant State or Territory.
The Referral Act amended sections 423, 424 and 426 of the Act to insert this rule about standing to make it clear on the face of the legislation.
When this amendment commences, regulation 3.10 of the Fair Work Regulations will no longer be required.
Schedule 2 – Amendments of Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009
Item [1] – After regulation 2.05A
This item inserts new regulation 2.05B into the Transitional Regulations.
The various industrial laws of the referring States permit applications to be made to State industrial bodies for a permit, licence or authority which would allow an employee to be paid an amount that is less than the relevant minimum wage of the State. The grounds for the making of the application vary across the States, as do the preconditions for granting such applications.
For example, section 696 of the Industrial Relations Act 1999 (Qld) allows an aged or infirm person or an inspector to apply to the Registrar for a permit for the aged or infirm person, alleged to be unable to earn the minimum wage that applies to a calling, to work in the calling for less than the relevant minimum wage.
This regulation preserves the operation of any permits, licences or authorities of this nature already in existence in respect of Division 2B referral employees.
These permits, licences or authorisations will continue to operate until either the time that they are expressed to expire, or the end of the period of 12 months after the Division 2B referral commencement, whichever occurs first.
Existing permits cannot be extended nor can new permits be made.
This regulation allows the rates specified in the permits, licences or authorisations to operate as an exception to the general transitional rules about minimum wages in Schedule 9 to the Transitional Act.
Item [2] – After regulation 3.03
This item inserts new regulation 3.04 in Part 3 of the Transitional Regulations.
Regulation 3.04 inserts new Part 9 and item 44 into Schedule 3 of the Transitional Act. New item 44 provides for the continued coverage of certain transitional instruments for employees who are participants in the Community Jobs Plan (CJP) and Green Army programs, which are labour market programs operating in Queensland.
Employees and their employers who are participants in CJP and the Green Army program are currently covered by transitional instruments derived from the Community Jobs Plan Employees’ Conditions Order (the CJP Order). However, following the commencement of modern awards on 1 January 2010, many participants in the CJP and Green Army programs will instead be covered by modern awards.
Regulation 3.04 provides that participants in the CJP and Green Army programs whose terms and conditions of employment immediately before 1 January 2010 are derived from an award-based transitional instrument derived from the CJP Order would remain on these instruments until 30 June 2012. This aligns with the completion date of the first Green Army program.
The CJP order provides wages for program participants based on levels set by the State Training Wage Award (Qld). For this reason, affected employees are also covered by a transitional Australian Pay and Classification Scale (APCS) derived from the State Training Wage Award.
This regulation makes clear that while an employee is covered by an award-based transitional instrument satisfying the above criteria, the National Employment Standards (NES) and a modern award do not apply. This is the case despite the rule in section 47 of the Act which specifies when a modern award applies to an employer or employee and any rules in the Transitional Act or the Act regarding the application of the NES to transitional instruments.
In respect of other employees who are not participants in CJP or the Green Army program, an employer will be covered by the relevant modern award applicable to their industry or the employee’s occupation. Other employees will also be entitled to the NES. The employer will also be covered by any continuing transitional instrument in respect of future employees at their workplace who are participants in CJP or the Green Army program.
The regulation will cease to have effect immediately following the completion of the first Green Army program on 30 June 2012.
Item [3] – After Part 3
This item inserts new Part 3A and new regulations 3A.01 and 3A.02 into the Transitional Regulations, which deal with transitional provisions for Schedule 3A to the Transitional Act and the treatment of State awards and State employment agreements of Division 2B referring States.
Regulation 3A.01 – Continued coverage under Division 2B State award
Regulation 3A.01 inserts new Part 4A and new items 36A and 36B into Schedule 3A of the Transitional Act which deal with the continued application of certain transitional instruments for State reference employees.
Item 36A will have the same effect as proposed regulation 3B.03 in relation to State reference employers and employees to whom a training arrangement applies covered by a Division 2B State award.
Item 36B will have the same effect as regulation 3.04 in relation to State reference employers and employees whose terms and conditions of employment were derived from a State award affected by the CJP order immediately before 1 January 2010. It will also apply to new employers and employees to the extent that they are participants in these programs.
Regulation 3A.02 – Terms about disputes relating to matters arising under Division 2B State awards
Item 7 of Schedule 3A to the Transitional Act provides that any dispute resolution terms in source State awards will not be retained as terms of the Division 2B State awards derived from them. Instead, all Division 2B State awards will be taken to include the model term that is prescribed by the regulations for dealing with disputes arising under Division 2B State awards.
This regulation prescribes the model dispute resolution clause to be read into Division 2B State awards. The model dispute resolution clause is based on the clause developed by the AIRC during the award modernisation process to be included in all modern awards.
Item [4] – After regulation 3B.01
This item inserts new regulation 3B.02 after regulation 3B.01 of the Transitional Regulations.
Regulation 3B.02 – References to award-based transitional instruments and continued coverage under award-based transitional instruments
This item inserts new regulation 3B.02 in the Transitional Regulations to provide for continued coverage under transitional instruments for employees to whom a training arrangement applies. It also deals with references to award-based transitional instruments in modern awards.
This regulation modifies Schedule 5 to the Transitional Act by inserting new item 15 after item 14 of Part 4, along with new Parts 5 and 6 (consisting of new items 16 and 17 respectively).
For the avoidance of doubt, new item 15 provides that a reference to an award-based transitional instrument in a term of a modern award dealing with the transition from an award‑based transitional instrument to the modern award includes a reference to a transitional award within the meaning of Schedule 6 to the Workplace Relations Act 1996 (WR Act).
The transitional arrangements developed by the AIRC for inclusion in modern awards are expressed only to apply where immediately before 1 January 2010 an award-based transitional instrument applied to an employer and employee. A transitional award within the meaning of Schedule 6 to the WR Act does not fall within the definition of award-based transitional instrument. New item 15 would have the effect of deeming a transitional award to be an award‑based transitional instrument for the purposes of those modern award transitional arrangements so that they would also apply to Division 2B State reference employers and employees moving from a transitional award within the meaning of Schedule 6 to the WR Act to a modern award.
New item 16 of Schedule 5 to the Transitional Act continues coverage of transitional instruments for certain employees to whom a training arrangement applies.
Most modern awards will commence operation on 1 January 2010
and many contain terms and conditions for employees to whom a training
arrangement applies. As a result, from
1 January 2010, most employees to whom training arrangements apply and who are
currently covered by award-based transitional instruments, will instead by
covered by modern awards.
This item ensures that for employees to whom a training arrangement applies (and their employer), an award-based transitional instrument continues to cover the parties where the instrument:
Competency-based wage progression enables employees to whom training arrangements apply to access higher pay rates if they attain certain skills levels ahead of time, thereby completing their traineeship or apprenticeship more quickly. Employees still progress on a time-served basis if they do not achieve competency in the relevant stage of their training arrangement.
This regulation ensures employees who currently have access to competency-based wage progression continue to have access to those arrangements for the duration of their traineeship or apprenticeship. Similarly, entitlements for apprentices to be provided with tools by their employer will continue to apply for the duration of their apprenticeship.
Affected employees will also continue to be covered by the transitional APCS that covered them immediately before 1 January 2010.
This regulation makes clear that while an employee is covered by an award-based transitional instrument satisfying the above criteria, a modern award does not apply. This is the case despite the rule in section 47 of the Act which specifies when a modern award that covers an employer or employee will apply to the employer or employee.
In respect of any other employees who are not employees to whom a training arrangement applies, an employer will be covered by the relevant modern award applicable to their industry or the employee’s occupation. The employer will also be covered by any continuing transitional instruments in respect of future employees at their workplace to whom training arrangements apply.
New item 17 of Part 6 of Schedule 5 to the Transitional Act provides that for the purposes of paragraphs 8(3)(d) (for employees) and 8(4)(d) (for outworkers) a reduction in an employee’s take home pay is taken to be attributable to the Part 10A award modernisation process if immediately before the commencement of a modern award a transitional award or a Division 2B State reference transitional award applied to the employee.
Item [5] – After Part 3B
This item inserts a heading for new Part 3D into the Transitional Regulations which deals with transitional provisions for Schedule 7 to the Transitional Act (enterprise agreements and workplace determinations made under the Act), and new regulation 3D.01.
This regulation inserts new Part 4B (Better off overall test in relation to transitional provisions inserted into modern awards by FWA after Division 2B State referral) and new item 20B into Schedule 7 to the Transitional Act.
New item 20B provides that, in respect of employees covered by a Division 2B State award, a modified better off overall test (modified test) applies to the assessment of an enterprise agreement or an enterprise agreement as proposed to be varied, against a modern award if that award contains provisions of a transitional nature.
The modified test only applies when FWA assesses an enterprise agreement, or enterprise agreement as proposed to be varied, under section 193 of the Act (as amended by Part 4A of Schedule 7 to the Transitional Act) during the transitional period. The transitional period is defined as 1 January 2010 to 31 December 2014.
The modified test only applies in the transitional period where a modern award contains transitional provisions. Transitional provisions are provisions that transition the terms and conditions of employment set out in a Division 2B State award that covered the employees immediately before the modern award came into operation to those contained in the modern award.
Under item 29 of Schedule 3A to the Transitional Act, FWA must consider varying modern awards in the 12 months following the Division 2B referral commencement to include transitional arrangements for employers and employees covered by Division 2B State awards (other than Division 2B enterprise awards). FWA must only vary a modern award if the purpose of the variation is to continue (in whole or in part) the effect of terms that are contained in a Division 2B State award and the terms to be included deal with matters that are permitted to be included in modern awards by section 136 of the Act.
The intention of modifying the test for modern awards containing transitional provisions is to ensure that in applying the better off overall test, FWA compares the enterprise agreement, or the enterprise agreement as proposed to be varied, against the relevant modern award as it will actually operate in the future, taking into consideration the effects of any transitional provisions contained in the modern award.
To achieve this, FWA is required to compare the enterprise agreement, or the enterprise agreement as proposed to be varied, against the modern award at separate points in time over the life of the agreement. FWA is only required to assess the enterprise agreement, or the enterprise agreement as proposed to be varied, once, at the date the application is made to FWA for approval of the agreement. However, when assessing the agreement, FWA is required to compare the enterprise agreement and the relevant modern award as they will operate:
This assessment approach requires FWA to compare the terms of the relevant modern award with the enterprise agreement on a line-by-line basis at the test time and on each subsequent 31 July as opposed to taking an aggregated or averaging approach to the terms and conditions.
FWA is only required to consider the terms of the modern award as they are at the date of assessment, including the transitional provisions. FWA does not have to take into account any variations to that modern award that may be subsequently made.
When applying the modified test, FWA must be satisfied that each of the employees mentioned in section 193 of the Act would be better off overall at each of the points in time that the comparison with the modern award is made.
Although the modified test requires FWA to be satisfied that each modern award covered employee and each prospective modern award covered employee will be better off overall, it is not intended that the approval process would require FWA to enquire into each employee’s individual circumstances. Section 193 of the Act provides that FWA is able to apply the modified test to classes of employees (see subsection 193(7) of the Act).
Item [6] – Regulation 5.10
This item repeals regulation 5.10 of the Transitional Regulations following an amendment to the Transitional Act that has the same effect as this regulation.
Schedule 5 to the Transitional Act provides for continuation of the award modernisation process and preserves Part 10A of the WR Act for that purpose.
Regulation 5.10 of the Transitional Regulations modifies Part 10A of the WR Act so that references to employers and employees in that Part are taken to be references to national system employers and national system employees as defined in sections 13 and 14 of the Act. National system employer is defined in section 14 of the Act. The definition of national system employer was extended by section 30D of the Act to encompass employers (including unincorporated, public sector and local government employers) and employees within the scope of Victoria’s reference of workplace relations matters to the Commonwealth under the Victorian Referral Act. The definition of national system employee was similarly extended by section 30C of the Act.
This enables employers and employees who become national system employers and employees as a result of Victoria’s reference to participate in the award modernisation process from 1 July 2009 and become covered by modern awards. Employers and employees who become national system employers and employees as a result of references from other States will be able to transition to modern awards under the process set out in Part 4 of Schedule 3A to the Transitional Act.
For clarity, item 17A of the Referral Act inserted new subitems 2(3A)(a) and (b) of Schedule 5 to the Transitional Act to make similar provision to regulation 5.10 of the Transitional Regulations on the face of the Transitional Act. New subitems 2(3A)(a) and (b) of Schedule 5 provide that Part 10A of the WR Act applies as if a reference to an employee and an employer in that Part is taken to be a reference to (respectively) a national system employee and a national system employer. This clarifies that a modern award made under Part 10A of the WR Act can cover national system employers and employees, including those who only fall within the definitions of these terms because of a State reference (such as unincorporated employers and Victorian public sector and local government public sector employers, and their employees).
When this amendment commences, regulation 5.10 of the Transitional Regulations will no longer be required.
Item [7] – Schedule 2.1, paragraph 20A(1)(a)
Item [8] – Schedule 2.1, subitem 20A(2)
Item [9] – Schedule 2.1, paragraph 20A(2)(a)
Item [10] – Schedule 2.1, subitem 20A(3)
These items amend item 20A of Schedule 2.1 to the Transitional Regulations to extend the application of the modified better off overall test to the assessment of an enterprise agreement as proposed to be varied.
The amendments make clear that in applying the better off overall test under subsections 193(1) and 193(3), FWA compares an enterprise agreement, as well as an enterprise agreement as proposed to be varied, against the relevant modern award, taking into consideration the effects of any transitional provisions contained in the modern award in the future.
These items extend item 20A to have the same effect as item [5] above.