The substance of the Bill largely reflects Labor’s initial Forward with Fairness policy. From initial analysis, it seems that the content of the Bill is not significantly different to what was proposed, although there are a few additions which weren’t forecast.

The following alert is provided to assist employers in understanding the substance and effect of the Bill and provide you with practical scenarios in order to assist you in understanding how the provisions of this Bill will operate in practice.

However, the Bill is yet to officially become law as it awaits a senate inquiry and debate. The Bill will be taken to commence from the day on which it receives Royal Assent. Recent guidelines suggest that a senate inquiry will take place towards the end of April, and we are expecting that the Bill will become law at the end of May on a single day to be fixed by Proclamation. It is this day that will be the commencement date of the Bill.

The end to AWA’s

As anticipated, the Bill prohibits any new individual Australian Workplace Agreement (AWAs) being made from its commencement date. Those AWAs that have already been made but not yet lodged can be lodged only within 14 days after the commencement of the Bill.

The Bill provides that existing AWAs will be able to operate to their full term with the latest possible expiry date of all AWAs as 31 December 2012 unless terminated or replaced.

Moving to Individual Transitional Employment Agreements

The Bill provides for the introduction of Individual Transitional Employment Agreements (“ITEAs”) to be made during the transitional period of award simplification. All ITEAs are to have a nominal expiry date of no later than 31 December 2009. The Bill enables those employees whose employment is currently regulated by AWAs and new employees to use an ITEA up until that date.

ITEAs must be made in writing and are only available to employees whose employer had at least one worker on an AWA as of 1 December 2007.

A Return to the No Disadvantage Test

The Bill reintroduces the No Disadvantage Test which is to replace the Fairness Test. ITEAs and new collective agreements will only commence operation once the Workplace Authority Director has approved them on the basis they pass the new no disadvantage test.

An ITEA passes the no-disadvantage test if the ITEA does not or would not result in a reduction in the employee’s overall terms and conditions of employment under any “reference instrument” (such as a collective agreement or award) relating to the employee.

A collective agreement passes the no-disadvantage test if the agreement does not result, or would not result, on balance, in a reduction in the overall terms and conditions of employment of the employees under any relevant general instrument or if there is none then the award designated by the Workplace Authority Director relating to one or more of the employees.

Employee collective agreements or union collective agreements are taken to pass the no-disadvantage test, even if they result in a reduction to the employee(s) overall terms and conditions, if because of exceptional circumstances, approval of the agreement would not be contrary to the public interest. These circumstances are where making the agreement is part of a reasonable strategy to deal with a short-term crisis, and to assist in the revival of, the employer’s business.

Union Greenfields agreements, employer Greenfields agreements and multiple-business agreements are also subject to the same rules regarding the no disadvantage test,

In addition to the No Disadvantage Test employees are entitled to the current Australian Fair Pay and Conditions Standard (AFPCS). The AFPCS will prevail over a workplace agreement to the extent to which it provides a more favourable outcome for the employee or employees.

In determining whether a workplace agreement passes the no disadvantage test, the Workplace Authority Director will take into consideration the work obligations of the employee covered by the agreement which may involve contacting the employer, other employees who are also covered by the agreement, a bargaining agent, a union or organisation bound by the agreement (in the case of a union collective agreement or union greenfields agreement).

Agreements that fail the no disadvantage test will cease to operate. The employee whose employment was subject to the agreement will be entitled to back pay in accordance with the prior instrument that they were under, or in accordance with the "designated award". When the agreement ceases to operate, the designated award in relation to that employee will operate to cover that employee’s employment.

Redundancy provisions contained in any agreement that fails the no disadvantage test continue to bind the employer until either a period of 24 months has passed, the employee ceases to be employed by the employer or another workplace agreement comes into operation covering the employee.

Employers may lodge a variation of the agreement which will go through the same process in determining whether the varied agreement passes the no disadvantage test. The varied agreement will come into operation on the seventh day after the date on which the Workplace Authority issues a notice advising that the agreement passed the test.

Employer greenfield agreements can only be varied by an undertaking given to the Workplace Authority director.

AIRC to undertake Award modernisation process & repeal of fact sheet requirements

The Bill allows the process of award modernisation to commence by the Australian Industrial Relations Commission.

The Bill has also removed the requirement for employers to provide copies of the Fact Sheet to employees.

Exposure Draft: 10 National Employment Standards

2. What if I have recently issued an AWA but not yet lodged it, is it still valid? Can it still be lodged?