26 Nov 2007
Employment Alert - ALP election victory marks a further period of change in industrial relations
In modern times a change of government at the federal level has been marked by corresponding changes to the industrial relations and employment laws. This Labor victory will be no different.
Transitional arrangements
Our attention now shifts to how Labor will manage the transition from Work Choices to its Fair Work Australia model. This transition has been identified as an early priority for the new government and will be a critical first challenge for the Labor Government.
The workplace relations policy documents released by Labor during the lead up to last week's election provide a broad vision of what this future will be but it is not unfair to suggest the details of these plans are a work in progress. The detail of the transitional arrangements are what our clients will want to know about as soon as possible. We anticipate a transitional bill to be drafted quickly. Yesterday, Deputy Prime Minister elect Julia Gillard announced that Labor is already working on a transition bill to change the Work Choices legislation, which will be introduced to Parliament as soon as it is recalled. This bill is expected to include the following areas of change:
- The 10 National Employment Standards will be identified although they will not come into operation until 1 January 2010.
- Australian Workplace Agreement transitional arrangements which will be stated to have effect from 1 December 2007.
- Abolition of the 100 employee exemption in unfair dismissal laws.
- Review of the Fairness Test.
- Abolition of employer only greenfield agreements.
- Arrangements so that the award simplification process can commence on 1 January 2008.
Negotiating these changes
The Senate results suggest that the government will have significant challenges ahead. Until next July the Coalition has a majority in the Senate. Senator Barnaby Joyce has publicly stated he will vote to allow those changes that have been expressly announced in the lead up to the election. This may be the release of the gridlock that would otherwise exist between now and 1 July next year.
The large swing achieved by Labor in the lower house has not been matched by a collapse of the position of the Coalition in the Senate. The counting suggests that the total numbers in the Senate from 1 July 2008 will be 37 for the Coalition, 32 Labor, 5 Green, 1 Family First and Nick Xenophon from South Australia. This would leave the Coalition one vote short of a blocking majority in its own right. The Greens are not likely to hold the balance of power on their own and Labor would have to negotiate with both the Greens and one of Steven Fielding or Nick Xenophon.
Mr Xenophon's campaign centered on anti gambling, in particular poker machines. His messages on Work Choices were moderate although he expressed the view that 'The WorkChoices legislation went too far. There definitely needs to be some revisiting of it – you need to consult with small businesses that are nervous'. How this position will play out in negotiations with the new government will be telling.
This will be a fascinating period. A challenging time.
The Labor Government's key areas for reform
Let's refresh our memories as to what are the areas of change. The key areas include:
AWAs will be phased out. During the two year transitional period said to commence this Saturday 1 December 2007 employers have two options in relation to individual workplace agreements:
1. Continue with existing AWAs; or
2. Enter into a special instrument called an ‘Individual Transitional Employment Agreement’ (ITEA).
AWAs made prior to 1 December 2007 remain in force and will only be terminated in accordance with the current rules.
Employers will be able to enter into individual common law contracts of employment with employees earning above $100,000 per annum without reference to awards. Although awards would not apply, the individual common law contract would be subject to ten National Employment Standards.
- Ten national Employment Standards
- Reintroduction of unfair dismissal laws for all employers
- Award modernisation and simplification by 1 January 2010
- Fair Work Australia to be established by 1 January 2010
- Harmonisation of OHS laws
These changes will be drafted in an environment where the annual growth rate for labour costs is at its fastest pace in nine years. And where unemployment is at close to a 33 year low. This makes for a very tight labour market which is a reality that many of our clients are battling with daily. How the Labor Government manages the expectations of both employers and the union movement in this environment will be critical.
What does not change
The commitment of Labor is to introduce these changes in a fair and reasonable manner. That allows existing workplace agreements to operate for their full term. The Labor government has also promised to maintain the Australian Building and Construction Commission as well as the Code.
Labor has promised not to change the laws relating to industrial action, secret ballots, right of entry and secondary boycotts.
What next?
We will shortly be forwarding to you a more detailed analysis of what these prospective changes mean to employers. We also promise to keep you informed of any significant developments as they occur over the next year.
For further information, please contact the author:
John Tuck, Partner
Tel +61 3 9274 5051
john.tuck@dlaphillipsfox.com
Useful Links
Upcoming seminar - Navigating Workplace Relations post the Federal Election
This national seminar will be conducted as follows:
Adelaide - Thursday 29 November 2007
Brisbane - Tuesday 27 November 2007
Canberra - Wednesday 5 December 2007
Melbourne - Thursday 6 December 2007
Perth - Tuesday 4 December 2007
Sydney - Wednesday 5 December 2007
For further information please contact DLA Phillips Fox Workplace Relations and Employment.