Since the passage of the Government’s Transition to Forward with Fairness Act 2008, a wide range of consultation has been taking place on Labor's workplace relations reform agenda in preparation for the release of its substantive IR legislation.

At the end of March, the Australian Industrial Relations Commission (AIRC) was issued with an award modernisation request by Julia Gillard, allowing the AIRC to begin the task of creating new modern awards. The application of these modern awards will be confined to employees who earn less than $100,000 (base salary) per annum.

The new modern awards will involve “starting from scratch” and will involve consultation with various key stakeholders, unions and employer groups.

The intention is to make modern awards simple and easy to apply. The AIRC is also required to have regard to work/life balance in the modernisation process. Managers and supervisors will remain award free but new modern awards will be created to cover workers in new and emerging industries or occupations.

It is anticipated that by the end of June 2008, the AIRC will be ready to publish a finalised list of priority awards, the model flexibility clause and a timetable for the overall process.

Priority Industries and Occupations
The AIRC will commence the process by classifying the industries to which the awards will apply. Developing the priority list will take into account those industries and occupations which currently have high numbers of AWAs and NAPSAs. A draft list of priority industries already published includes aged care, coal mining, hospitality, nursing, insurance, racing, rail, retail and textile, clothing and footwear industries.

Current federal and state awards (known as Notional Agreements Preserving State Awards, NAPSAs) will both be subject to the award modernisation process. Pre-drafting will then take place in relation to the priority awards. This drafting process will take into account wage rates derived from NAPSAs and transitional awards.

The target is that by 31 December 2008 modern awards in priority industries and occupations will be complete and the entire award modernisation process is expected to be complete by 31 December 2009.

Model Flexibility Clauses
The AIRC will also be required to develop a “simple and practical” model individual flexibility clause for insertion into each modern award. Model flexibility clauses will be included in the modern awards in order to allow an employer and an individual employee to agree on arrangements which meet the genuine individual needs of the employer and the employee. These flexibility clauses cannot be used to the detriment of employees, and should enable employers and employees to apply them without seeking legal advice.

Examples of matters which might be dealt with in an award flexibility arrangement could include annualised salary arrangements, cashing out annual leave, rostering and hours or work, provisions altering the operation of a standard award entitlement or adjustments to hours of work to accommodate family responsibilities.

The AIRC has already released three draft model flexibility clauses, one from the Australian Chamber of Commerce and Industry (ACCI), one from the Australian Council of Trade Unions (ACTU) and one from the AiGroup (AiG).

Task Undertaken by the AIRC	Expected Date of Completion
Initial consultations on award modernisation commences	26 May 2008
Last day AIRC will accept written submissions and suggestions about the process	6 June 2008
AIRC to publish a model flexibility clause, finalised list of priority industries/occupations and a timetable for the completion of the process.	20 June 2008
AIRC to publish timetable for the creation of all modern awards	30 June 2008
Draft versions of modernised priority awards published for consultation	5 September 2008
Last day for finalising modernised priority awards	12 December 2008
Modern awards in priority industries complete	31 December 2008
Award modernisation process complete	31 December 2009
Substantive IR legislation expected to be proclaimed	1 January 2010