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New Workplace Laws

As we advised in our June 2009 newsletter, the Fair Work Act 2009 (Cth) has been introduced with its first major commencement date being 1 July 2009. Our first Newsletter on the changes dealt largely with the changes to Unfair Dismissal laws. This Newsletter deals with the introduction of the National Employment Standards and Award Modernization under the Fair Work Act and how this affects the terms and condition of employment.

Terms and conditions of employment

The terms of an employee's employment can be and have been covered by a number of different agreements, instruments and laws. These include an individual employment contract, AWA's, enterprise agreements, federal awards, National agreements preserving state awards, pre-Work Choice certified agreements, individual transitional employment agreements, not to mention legislation such as Workchoices and the Safety Net - now the Fair Work Act - and soon to be introduced, National Employment Standards and Modern Awards, as well as the Long Service Leave Act and Occupational Health & Safety Act and State and Federal anti- discrimination and equal opportunity legislation.

It is no wonder we are all well and truly confused!

National Employment Standards

The Fair Work Act introduces 10 National Employment Standards (“NES”) which are to take effect from 1 January 2010. The NES prescribe the minimum terms and conditions of employment for all employees covered by the Act regardless of the employee's level of income or position.

Whilst some of the NES are the same as those minimum employment standards prescribed by the Workplace Relations Act 1996, the NES impose some new obligations on employers most significantly the introduction of severance payments for all employees, new and extended parental leave entitlements and the right to request flexible work arrangements.  Employers need to ensure they comply with the NES as and from 1 January 2010.  If an employer contravenes the NES they will be exposed to penalties and other orders. The NES cannot be contracted out of and they prevail over conditions in a contract which seek to provide for less. The NES will apply to the terms and conditions of an employee's contract regardless of whether they are contained in a written agreement or not. They include in short the following:

Maximum weekly hours

Weekly hours of work may not exceed 38 hours plus reasonable additional hours. Employees may refuse to work additional hours if the request is unreasonable in all of the circumstances.  Factors that must be taken into account when considering whether a request is reasonable includes the health and safety of the employee, the employee's personal circumstances such as family responsibilities, the needs of the workplace and whether there are increased rates for the additional hours.

Averaging of hours can be used when an employee's hours change from week to week. This averaging can be done over a period of 6 months or less as agreed between the employer and employee, save where a specified period for averaging is contained in an applicable award or agreement.

Right to request flexible working arrangements

All employees, including casual employees, will have a right to request flexible working arrangements if:

• they are the parent of or have responsibility for the care of a child under school age; and
• the flexible working arrangement is to assist the employee care for the child; and
• the employee has at least 12 months continuous service or is a long-term casual employee with an expectation of ongoing employment on a regular and systematic basis.

The request must be in writing and set out the change sought and the reasons for the change. The employer must respond to the employee's request in writing within 21 days, indicating whether the request is granted or refused and the reasons for the response. A bare refusal is insufficient.

An employer may only refuse the request on reasonable business grounds. Reasonable business grounds will include, for example, the effect on the workplace and the employer's business, the employer's capacity to recruit a replacement or their ability to redistribute work among existing staff.

The employer's decision will not be subject to review but an unreasonable refusal could give rise to a discrimination complaint so care needs to be taken.

Annual leave

Full-time employees will continue to be entitled to 4 weeks' paid annual leave per year and shift workers will be entitled to 5 weeks' paid annual leave per year. Leave will accrue progressively according to an employee's ordinary hours of work. Annual leave will be calculated at an employee's base rate of salary.

Annual leave may be cashed out if such an arrangement is permitted by a modern award or an enterprise agreement, provided that the employee has at least 4 weeks' leave remaining. Award-free employees may also cash out annual leave provided they have at least four weeks' leave remaining

Personal carers' leave and compassionate leave

Employees will continue to be entitled to 10 days' paid personal leave (sick leave and carers' leave) per annum. There will be no limit on the number of carers' leave days an employee may take each year. Personal leave may be cashed out in limited circumstances. All employees, including casual employees, can take 2 days unpaid carers' leave on each occasion that a member of their immediate household or family requires care or support because of illness or injury if all paid personal leave is exhausted. Employees may take 2 days' paid compassionate leave in the event of a serious illness or death in their immediate household or family. Casual employees will also be entitled to unpaid compassionate leave.

Parental leave

Maternity and paternity leave will now be known as parental leave which will cover "birth-related leave" and "adoption-related leave". An employee must have at least 12 months continuous service in order to be eligible for parental leave. Both members of a working couple, which includes de facto and same sex couples, will be entitled to take 12 months unpaid parental leave at separate times. An employee who takes all of their available 12 months parental leave may request additional unpaid leave of up to 12 months in writing. That request may only be refused on reasonable business grounds. The employer must provide a written response within 21 days and must provide reasons for any refusal. The employer's decision will not be subject to review but an unreasonable refusal could give rise to a discrimination complaint. If the employee's spouse (including de facto or same sex spouse) has already taken parental leave, the period of any extended leave taken by the employee must be reduced by the corresponding amount.

Members of an employed couple must take their unpaid leave at separate times except for a period of concurrent leave of up to 3 weeks from the date of the child's birth or placement of an adopted child which can be extended up to 6 weeks.

Long service leave

The NES do not set out specific long services leave entitlements. Instead the NES provides that the employer is required to provide long services leave as per applicable awards or State legislation. The introduction of a national long service leave regime is being considered.

Community service leave

Employees will be entitled to unpaid leave in order to attend to "community services". Community services include jury service, voluntary emergency management activity and any other activities prescribed by regulations.
If an employee takes community service leave to attend jury service, they are entitled to make-up pay calculated at their base rate (less any jury service payments) for the first 10 days of jury service.

Public holidays

Employees will now have a legislative right to be absent from work on public holidays which are the standard nominated public holidays each year. The employer continues to have the right to request for the employee to work on a public holiday if the request is a reasonable one.

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