Fair Work Act vs Work Choice - Report Example

Fair Work Act vs. Work Choice [Student’s Name] [Course Title] [Tutor’s Name] Abstract Work Choices Act has been considered as a mixture of government retreat from its intervention and labor market. In effect to unfair dismissal the Fair Work Act applies to the larger National Systems and has widely replaced work choices. Today, most Australian businesses and organizations are continuing to enjoy impact created by this new law on certain employer legal obligations and employment relation. This studies focuses on understanding what both work choices and Fair Work Act are, their features and implications and finally, their contribution towards arguing the topic widely. Introduction Over the past century, Australia has experienced tremendous change in its workforce. This has been contributed by increase in the number of working women, massive change of people from permanent jobs to part time or casual jobs and regular changing of employers. As a result of this, issues of family leaves, discrimination and termination of employment have been on the increase which subsequently has forced the government to come up with laws to government and control employment. The Workplace Relations Amendment (Work Choices) was passed in 2005 by the Federal Government and has led to a transformation in the Australian employment laws. The law underwent continuous reforms and in 2009, it was replaced by the Fair Work Act which set a completely new platform for the Australian industrial relations. With significant change in the employment laws, scope of the national system has increased dramatically. However, the system has brought about considerable changes in with the most evident being creation of confusion on the rights and obligations of employers and employees. Introduction of the Work Choice reforms in 2005 brought about a revolution in the industrial relations in Australia. The paper seeks to evaluate WorkChoices in terms of features and reforms it underwent before being replaced by the Fair Work Act. It will further analyze key features of the Fair Work Act with special attention on how it has impacted trade unions in Australia that work to protect the rights of employees. Finally, an overview of the interrelationship between two laws will discussed comprehensively and determine how this laws are effective in the overall industrial relations of Australia. WorkChoices In July 2005, the Workplace Amendments was put in place by the Federal Government and was considered as one of the most fundamental developments in Australian industrial relations since federation (House of Representatives 2005). Work Choices reforms, which followed one and a half years later demonstrated the strong determination of Howard, who came up with the idea, to establish key changes in the industrial relations of Australia (Howard 2005a). Work choices included most of the elements which Howard longed to see in the industrial relations and they included increased flexibility in bargaining, labor market regulations, regulations on unfair dismissal and industrial relations system decentralization (Howard 2005b). Key features of WorkChoices It is quite evident that WorkChoices has provided fundamental changes in the general sector of the industrial relations and specifically to six main areas of industrial relations practices and laws. 1. Transformation Constitutional Foundation: Establishment of WorkChoices led to a shift of constitutional foundations for laws governing industrial relations from the initial arbitration and conciliation power to the corporations power. Although this law has several specified exceptions, it operates with exclusion of all other laws of the state and covers all areas of industrial relations. However, this law is only applicable to constitutional corporations such as financial and trading corporations and their employees. According to Preston and Crockett (2004), the system does not consider about 15- 25% of Australian employees and it is predicted that other systems will persist in order to cover the marginalized groups. 2. Freezing, Withering and rationalization of Awards: According to this new legislation, AIRC cannot create any new awards and employers will continue to offer their already existing rewards to employees until they enter into two parties enter into agreement. McCallum (2006) explains that reforms effectively freeze all kinds of awards whereby provisions of the current awards are more generous than latest five statutory minima. The new federal system absorbs all the constitutional corporations that are binding to the state awards. 3. Elimination of No Disadvantage test and reduced agreement making: WorkChoices makes the process of making agreements such as union collective agreements, employee collective agreement among others simplified. The system ensures shortening of the time when the employer is supposed to issue notices to the employee. In addition to this, it brought about a process of agreement whereby agreements are lodged and not certified and has completely eliminated the no disadvantage test in which allowed certification of an agreement only if the relevant reward left the employee in a better position than before (Watson 2004). 4. Establishment of Australian Fair Pay Commission and removal of Australian Industrial Commission (AIRC): WorkChoices radically changed all the roles of AIRC and subsequently caused removal of its arbitral power. Addison and Belfield (2001) assert that in this system parties are expected to come up with procedures of resolving their disputes but not to consult the commission for such matters. The commission can only make order if expressly given the authority by all parties the agreement to do so. Besides losing the power of hearing cases pertaining to Safety Net Adjustments, the AIRC cannot effectively set minimum awards on wages or any other minimum standards. This responsibility has been passed on to the Australian Fair Pay Commission (AFPC) which has the entire mandate to set minima through its own made procedures and processes. Commissioners of AFPC who are appointed by the government use criteria that focus on prevailing microeconomic conditions such as inflation and unemployment in fixing of wages. This is opposed to the former criteria which used the principle of fairness in determining wage fixing criteria (Junankar 2000). 5. Increased regulation of industrial action and unions: WorkChoices introduces a character of anti-union which broadened the definition of industrial action as defined by union action as opposed to a narrower definition as per the employer industrial action. 6. Restrictions of employee protection from unfair dismissal: WorkChoices reforms severely curtail any action by employees regarding unfair dismissal. This kind of restriction only applies for employees working in firms where the number of employees falls below 100. However, employers of large corporations are also covered under this restriction if they state a genuine reason for dismissal (Leigh 2003). Implications of Work Choices According to Kramarz and Phillippon (2001), WorkChoices changes show potentially positive outcomes in the industrial relations of Australia but it is evident that they will take time before their effects can be fully manifested. On the other hand there are clear implications of the system as highlighted below; Inequality in the labor market and lowering of wages: The move to determine the minimum wage by the single decision of an appointed commission and weakening of the negotiating and bargaining power of trade unions will consequently lead to reduced wages in the industry. Inequalities in the labor market will not only be in respect to wages but also in relation to entitlements and working conditions. Highly paid professional will not experience the changes but the lowly paid casual workers will be adversely affected. The action of increased regulation on trade unions and elimination of award systems and standards further favors the employer and oppresses the employees in the process (Gollan and Hamberger 2003). Expansion of individual bargaining and contraction of collective bargaining: The legislation encourages employers to adapt a system of common law individual contracts and employer Greenfields agreements. Booth and Frank (1999) maintain that the Work Choice policy gives employers freedom to pay employees on a certified basis rather than on the basis of awards. Relatively low wages will be particularly detrimental for the youth and women and in the overall labor market as majority of the people will prefer to move the private sector or into self employment. Australian labor laws corporatization: With much freedom given to employers, industrial laws will eventually be replaced by a subset of corporate laws formulated by individual employers or a group of employers. Under this kind of setting, employees will be regarded as simply having a commercial contract with their employer and they will not be entitled to any form of industrial rights (Mangan and Johnston 1999). WorkChoices indeed demonstrates significant revolution in the industrial relations. In particular, it has acted as an action plan for the rather traditional AIRC, reacted towards issues that were against employers and was a checklist for proposals from employers. However, the legislation seems to offer employers too many powers which are resulting to oppression of employees and deteriorating the condition of industrial relations in Australia. Fair Work Act On July 2009, the Fair Work Act (FWA) commenced with the major provisions relating to National Employment Standards and Modern Awards. FWA is a law which is involved in providing new legislatives for work and industrial relation in Australia. Cooper & Ellem (2009) maintains that, this Act has replaced the Workplace Relation Act which is known in ultimately delivering law by way of work choices. Various key changes that have been brought by the Fair Work Act includes, new enterprise bargaining framework has been introduced, a regulatory body Fair Work Australia has began its operation, various unfair dismissal laws have applied and effective new rules have been implemented and have affected business transfers and union rights of entry (Cooper & Ellem 2009). Features of Fair Work Act There are various features that are being displayed in the FWA. These features includes; unfair dismissal, agreement making, general protections, union rights of entry and transfer of business. I. Unfair dismissal The Fair Work Act indicate that after completion of any definable qualified period an employee has the right to lodge what is known as an unfair dismissal claim. It further explain that businesses that are considered to be small will have a twelve month grace period in which they are able to dismiss their workers free from what is known as unfair dismissal whereas those that are not in the definition of a small business will have six month as qualifying period (Baird & Williamson 2009). Further, for an employee to be dismissed fairly, it is important that the employer abide by with a new code. Here, a checklist has been formulated to assists small businesses comply with the designed code. II. Agreement making Baird &Williamson (2009) maintains that, the Act indicates that unions are allowed to become parties to various enterprise agreements if only they represent a minimum of one employee from a particular work place. The act widely promotes collective bargaining whereby majority employees wish to bargain collectively with their employer and in turn the employer refuses, Fair Work Australia is issued with the mandate to change this agreement. The Fair Work Australia has the power to determine that an employer act and bargain is in good faith during the collective bargain period (Cooper 2009). III. General protections Sheldon (2008) asserts that, FWA requires that all adverse measures cannot be taken against employee who engages in exercising their various legitimate rights. Further, the Act comprises of various provision that allows the employee to sue their employers on certain definable grounds. These provisions are based on unlawful termination provisions and freedom of association (Sheldon 2008). Further, these protections cover all employees for various broader rights not forgetting covering actions that are short of dismissal. These actions includes; those discriminate or injures an employee, threats of pursuing adverse action and finally, affecting employees position adversely. IV. Union right of entry A union is only entailed to enter an employer’s premises if; it poses a valid entry permit, if proper notice of entry is given and the reasons of entry have to be one of the following: investigation of a suspected infringement of act, holding discussion with employees; or and Safety laws or under state occupational health. V. Transfer of business According to Baird et al (2009),FWA have added additional obligation which are placed on employers who are involved in transferring employees from one organization to another organization restructure. Buying or selling new transfers of business laws requires close attention because of the potential cost that arises due to employees transfers. If the work to be performed is the same and there is a great connection between the two employers and is hired within three months, then this employees enjoyed been covered by his/her previous employers agreement (Baird, Frino & Williamson 2009). VI. Modern awards Modern awards intend to simplify awards that usually apply to employers with intention that each designed award provides what is known as “safety net” to employees as opposed to being the basic means of controlling employment relationship. A modern award consists of a definable model flexibility clause in which employers can develop working arrangements which are not considered to be disadvantageous to their employees as opposed to relevant awards (George 2005). Opposed to previous award in unions, modern awards are formulated in four distinct stages of prioritization. Fair Work Act and businesses compared to work choices George (2005) asserts that, changes within workplaces relation in the past years have been significant and are widely required by employers in minimizing their risks. Being in a transition between Work Choices and Fair Work Act, these two legislations are seen to be build on employer assumption that are placed on various human resources programs where workforce is managed. For employers who have had an experience disputes with industrial relation, through the FWA will readily attest to industrial relation tribunals and courts. This implies that there is little sympathy for employers who fail to produce (George 2005). FWA Changes since work choices Wooden (2006) maintains that, the FWA has established new system within industrial regulation which has created a more definable national system involved in controlling industrial relations within Australia. Since the implementation of FWA, all states apart from Western Australia refer to their powers to commonwealth (Leeser 2011). This resulted into various changes have resulted to individual agreement which are usually negotiated under one on one basis thus shifting focus from what was known as collective bargain reducing involvement of various unions. Basing on collective bargaining, FWA has placed a stronger emphasis on collective as opposed to individual agreement that was dominant during the periods of work choices. The Act has continued to outlaw the pattern that was displayed in bargaining by widening distinction between non-union and union agreement (Leeser 2011). Focusing on good faith bargaining is considered to be at the core of the FWA. On its Act, good faith means entails; attending and widely participating on meetings, issuing out genuine considerations to proposals from other representative, refraining from unfair conduct which usually undermines freedom of collective bargain and that of association, disclosure of any relevant information, responding to different proposals made by other members of the bargain and finally, bargaining and recognizing agreements with other representatives. According to Taylor (2009), parties who want to seek orders from FWA if a representative or party fails to meet the named good faith obligations. Here, the good faith bargain does not require any bargaining representative to make any kind of concession during agreement or, in reaching agreement on the various terms that should be included within the said agreement (Taylor 2009). FWA stipulates that employers are needed to take tentative steps to notify their employees of their rights to identifiable bargaining agent not later than fourteen days after notification agreement (CCH Editor 2010). The notice should specify that an employee has the right to employ a bargaining agent to represent him during bargaining agreement. An employee is not expected to be a bargaining agent of another employee unless the company is entitled to represent that employee interest (Forsyth 2009). A person is entitled to reject any bargaining representative in writing. These representative within FWA are set in three identifiable division namely; employer, person appointed by employer by writing and finally, a person appointed by employee by way of writing. WorkChoices to Fair Work The main aim of the Fair Work Act, 2009 was to improve the relationships between the employers and the employees which had soured under the WorkChoices Act. The Fair Work Act was to result in the enhanced work place productive relations thus being able to promote the national prosperity economically that will in return realize promoted relationship between the Australians. The Fair Work Act is an extension process as a result of the amendments that followed of the WorkChoices Act in 2005. The Work Choice Act is criticized for having been against the rights of the employees and largely being in favor of the employers. Unlike the Work Choice, the Fair Work Act fairly balanced the employer and employee interests that had been under conflict through the inclusion of significant changes which included the safety net strengthening that aimed at perpetuating of problematic aspects brought about by the preceding legislation (Riley & Sheldon, 2008). The Act saw the inclusion of the Enterprise agreements and the Modern awards which was a new aspect that had not been incorporated in the old Work Choice Act. In this transition, the workplace laws are to experience the introduction of a National Employment System (NES). Under the NES, the employers and the employees are to agree on flexible working arrangements (Wooden, 2005). This law is not only applicable to the adult workers but also the employees below the age of 18 and those workers with disabilities. The disputes that resulted from the refusal of either party to accommodate the requests were to be settled by the Fair Worker Act (Business Council of Australia 2005). This is also applicable to conditions where the employer did not give or allow a parent to have unpaid parental leave for the second year. The NES contains 10 minimum entitlements for the workplace systems of relation. However, only certain sections of this application are accessible to the employees on a casual contract (Riley, 2011). Long term arguments on the Work Choice Act found it lacking and contrary to the commonwealth Australian constitution because the Fair Work’s Act constitutional basis were similar to those of the Fair Choices Act, 2005. It is clear that the federal powers in the Work Choice act were expanded and the legislations of the state territory jurisdiction had been shifted and placed on the federal parliament. It is however vital to note that the Fair Work Act is contained in the Sec 51 (xx) (WASF, 2009) of the commonwealth of Australia Constitution. Despite the allowance of the contracts on common law, the individual statutory contracts were abolished. The terms and conditions contained in the common law contract had to be beneficial and more that those contained in the NES (Hall, 2005). The major remarkable benefit of the NES is the establishment of the worker’s welfare basic or minimum safety net which guarantees them of minimum safeguard sets. This applies to the constitutional corporations which hare strategically secured under the Sec 51 (xx) of the commonwealth constitution (Business Council of Australia, 2005). Moreover, the state and territory laws apply in cases where there exists an absence of any award including the long service leave. The commencement of the NES in more than one state is applied in cases where there is a collective bargained arrangement (Hall, 2006). The agreements are however to be favorable and relevant to the laws that are applied in the affected states or territory laws (Peetz, 2005). An order to have a continuity of these arrangements can only be made by the FWA. Information notice on the termination or redundancy of employees is to be contained in the Fair Work Information Statement. This is to be issued by the Fair Work Ombudsman (FWO). The notice is also to contain the information on the entry rights of the union to the case (Wooden, 2000). The Fair Work Act also witnessed the inclusion of the provision that allows it to assess the effect of agreements or awards that are applicable based on the transfer of business and the need to have the impact of the new business employers assessed as well. The new deduction requirements for the wages of the workers below the age of 18 are to be bearing the authorization of the guardian or paren. In addition, the removal of any need for an employee or officer of an unregistered employer association to seek leave to appear before FWA (Stewart, 2009). It is however vital to note that anything that was done by an employer or employee prior to the commencement of the Act remains under and subject to the Workers Choice Act (Saville 1994). The laws and arrangements are to stay the way they are as per the rules and regulations of the preceding law. Any dismissal for example that occurred before the commencement date of the FWA will remain unlawful if the WCA allowed that (Forsyth & Stewart, 2009). If the arrangements or any dealings were made after the commencement date but in relation to the WCA laws then, the application of the FWA will take precedence (Forsyth & Holly, 2009). Any appeal made before the commencement date will be supervised and dealt with under the watchful eye of the FWA bench. If at all any processes that are in a continuation and started with the application of the WCA laws then it applies that the laws will still apply to its conclusion (Blackshield & Williams, 2006). The bridging period The WCA was expected to set the minimum standards in regards to the wages, annual leave, pay, hours of work, parental and professional leave. In addition, the terms in regards to the matters such as rest breaks, public holidays and termination notices will follow the WCA (Cooney, 2006). The employee agreements that were made prior to the commencement period will be have the application of the under the current no-disadvantage test. This was expected to function until the end of the year 2009 as per the constitution (Andrew, 2009). Minimum wage adjustments The existing pays were to remain as they had not been covered under the modern award. The TPCA Bill provided that the pay be in continuation till July 2011. This pays were expected to reflect the guidelines of the standard federal minimum wage and the federal minimum wages for persons with disabilities (Ron McCallum, 2007). The first annual review for FWA was expected to have completed its review on the minimum wages by July 2010. This was in addition to the adjustment of the modern awards. After the completion of the reviewing the minimum wage, the FWA was expected to make a national order for the minimum wage by July 2011 (Chapman, 2009). Employment transfer The business rules that existed before and after the commencement of the FWA law were to continue to apply. The employees that had been transferred to new employers were to continue with the old WCA rules until the end of 2010 to allow for the effectiveness of the new law in accordance with the constitution (Lucev, 2009). Conclusion Work Choices reforms, which followed one and a half years later demonstrated the strong determination of Howard, who came up with the idea, to establish key changes in the industrial relations of Australia. Work choices included most of the elements which Howard longed to see in the industrial relations and they included increased flexibility in bargaining, labor market regulations, regulations on unfair dismissal and industrial relations system decentralization. Various key changes that have been brought by the Fair Work Act includes, new enterprise bargaining framework has been introduced, a regulatory body Fair Work Australia has began its operation, various unfair dismissal laws have applied and effective new rules have been implemented and have affected business transfers and union rights of entry. The Fair Work Act is an extension process as a result of the amendments that followed of the Work Choice Act in 2005. The Work Choice Act is criticized for having been against the rights of the employees and largely being in favor of the employers. Unlike the Work Choice, the Fair Work Act fairly balanced the employer and employee interests that had been under conflict through the inclusion of significant changes which included the safety net strengthening that aimed at perpetuating of problematic aspects brought about by the preceding legislation Bibliography Addison, J. and Belfield, C. 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