Special Update - IR Bill

AHEIA lobbying efforts and current position 

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 has passed both houses of Parliament and will soon receive Royal Assent (FW Amendments).

In light of its passage, please join us together with Graeme Watson from Corrs Chambers Westgarth at our upcoming EB Dial-in via zoom this Friday 9 December at 2 pm for a special briefing and discussion. (UPDATED 14/12/22 – Please see presentation slides from Graeme Watson below)

In the meantime, please see below a summary of the key issues, AHEIA’s submitted amendments, the new Act provisions, and initial thoughts as to strategy.

Single Interest Multi-employer Agreements Authorisation Stream (SIMEAs)

Exempted Employers from SIMEA Stream

Proposed in the Original Bill

Exempted employers include those:

·         subject to an in-term single EA*

·         awaiting an application to be covered by a SIMEA

·         already bargaining for a SIMEA or

·         covered by a multi-employer agreement

“in term single, EA” means a single employer enterprise agreement that is less than 9 months past its NED.

AHEIA Proposed Amendments

AHEIA sought to exempt employers whose:

·         nominally expired EA pays at least a 10% premium on Modern Award

The EA expired less than 12 months ago and bargaining is underway for a replacement EA.

New Act Provisions

The exempt employer now includes those employers whose NED expired less than 9 months ago (“grace period”) and who are bargaining in good faith for a replacement EA.

(Note earlier amendments to the original Bill proposed a grace period of 6 months).

AHEIA Current Assessment

Universities who wish to stay in the single EA stream are advised to start and conclude formal bargaining as soon as possible with a view to having a replacement EA agreed upon or arbitrated within the 9 months ‘grace period’.

Common Interest Test

Proposed in the Original Bill

​​​​​​​Very broad ‘common interest’ criteria. Concern likely to lead to sector-wide agreements.

“The Fair Work Commission is required to have regard to the geographical location of the enterprises, the regulatory regime applying to the enterprises, the nature of the enterprises, and the terms and conditions of employment in those enterprises.”

AHEIA Proposed Amendments​​​​​​​

AHEIA sought to tighten the common interest test to enable better differentiation between employers based on size, the number of staff, market share, financial resources/capacity to pay as well as identifiable sub-sector groupings.

New Act Provisions

A new “reasonably comparable” threshold was added to the common interest test. It will be presumed an employer with 50 or more employees has “operations and business activities …[that are]… reasonably comparable with those of the other employers …unless the contrary is proved.”

AHEIA Current Assessment

The onus will now be on universities (not unions) to demonstrate why they should not be included in bargaining for a proposed SIMEA or roped into an existing SIMEA.AHEIA’s current view is that universities are likely to have common interests.

AHEIA is finalising our mitigation strategy on this issue and will shortly consult members seeking your feedback.

Union Veto on Offers that may be put to staff directly

(proposed multi-employer agreements only)

Proposed in the Original Bill

A written agreement is required from union(s) before employers may put offers to staff directly.

The ‘minimum bargaining period’ for the purpose of the FWC making an “intractable bargaining declaration” is six months.

AHEIA Proposed Amendments 

AHEIA submitted that employers must be permitted to put a final offer directly to employees as a penultimate step to resolving intractable bargaining disputes (ie ahead of any arbitration).

New Act Provisions

The removed ability of union(s) to “veto” employers putting final offer directly to staff. FWC must approve the putting of an offer to staff where unions are first consulted as to their views, but unreasonably withhold their agreement to do so.

(Pre-existing right of employers to put offers to staff in the single enterprise EA stream remains unchanged).

The ‘minimum bargaining period’ for the purpose of the FWC making an “intractable bargaining declaration” before moving to arbitration increased from six to nine months.

AHEIA Current Assessment

This is a significant improvement.

Together with the 9-month bar on seeking arbitration (for Unions or Employers), retaining the ability to be able to put offers directly to staff, will assist universities with the development of appropriate bargaining strategies.

Universities will be subject to the very real prospect of arbitration to settle outstanding issues.

Other Provisions of Concern:

Fixed-term Employment Provisions

Proposed in the Original Bill

The restrictions proposed in the Bill, may ‘leak through’ gaps in existing Sector Modern Awards where an EA has circumstances not explicitly listed in the Award. Re-engagement on fixed-term contacts is restricted under the Bill but is impliedly permitted by Awards and EAs with severance in certain circumstances.

AHEIA Proposed Amendments

AHEIA sought clarification and amendments to the Bill.

AHEIA proposed a three-year sunset provision to retain the Sector’s EA provisions to enable the harmonization of research funding with industrial arrangements.

New Act Provisions

No substantive changes were made to the Bill and ambiguity remains.

However, the commencement of the fixed-term contracting provisions has been delayed by up to 12 months to allow for further consultation between the government and stakeholders.

AHEIA Current Assessment

Over the coming 12 months, AHEIA will work with DEWR to seek further clarification regarding the continued use of fixed-term contracts exceeding two years, by way of guidelines.

Universities are advised to review their current fixed-term contract arrangements and consider the workforce planning implications of the reforms.

AHEIA will be calling on members for this data for future advocacy efforts.

BOOT

Proposed in the Original Bill

The BOOT is to be simplified to a global assessment of whether each employee is better off. FWC may only consider reasonably foreseeable and not hypothetical work patterns.

A new ‘reconsideration process’ of the original BOOT decision in circumstances where there has been a material change in working arrangements/circumstances which were not considered during the original approval process.

AHEIA Proposed Amendments

AHEIA sought to remove reconsideration provisions and retain s190 of the FW Act 2009 i.e. the existing ‘undertakings’ capacity.

New Act Provisions

The original position proposed in the Bill has been largely adopted.

AHEIA Current Assessment

Assessment reserved.

The strategy will depend on how the FWC applies these provisions in the initial test cases.   We expect significant transaction costs to members should retrospective reconsideration be applied by the Fair Work Commission.

Termination of Enterprise Agreements

Proposed in the Original Bill

Now only available where the employer is at risk of insolvency/threat to the viability of a business.

AHEIA Proposed Amendments

AHEIA sort to retain the current provisions enabling a broader scope for employers to terminate their Enterprise Agreement.

New Act Provisions

No substantive change to the bill.

AHEIA Current Assessment

This strategy of a university terminating its Enterprise Agreement is now effectively unavailable.