Changes to Fair Work Act

On Wednesday 28 November 2012, Federal Parliament passed the Fair Work Amendment Act 2012 (Cth) (Amendment Act) which implements a number of recommendations of the Fair Work Act Review Panel.

The changes to the Fair Work Act 2009 implemented by the Amendment Act are mostly administrative and technical in nature, and to that extent will not make a major difference to employers’ workplace arrangements.

However, there are some significant changes to the FW Act provisions dealing with unfair dismissal and general protections claims, certain aspects of agreement-making, and ballots for protected industrial action that employers need to be aware of. Changes have also been made to the structure and operation of Fair Work Australia (FWA), and the tribunal has been given new functions in relation to default superannuation funds in modern awards.

The Government’s intention in changing the unfair dismissal provisions of the FW Act is “to ensure the right of an employee to bring an unfair dismissal claim is better balanced against the right [of] an employer to ensure they are required to respond to applications that are genuine, and to ensure that [FWA] has the power to deal with unreasonable conduct in relation to a claim”. Whilst on the face of them, these changes appear beneficial to employers, the strong likelihood is that they will, in practice, provide little relief to employers from the challenges of the unfair dismissal regime.

The key changes that will be implemented are summarized as follows:

Contracts and Enterprise Agreements

1.  Individual union officials will not be able to act as bargaining representatives for employees not covered by the official’s union.
2.  Employees will not be able to opt out of an enterprise agreement.
3.  Employers will be prohibited from making enterprise agreements with only one employee.

Unfair Dismissal

4.  Aligning the timeframes for making unfair dismissal claims and general protections dismissal claims at 21 days.  The time limit for lodging an unfair dismissal claim has been extended from 14 to 21 days from the date that the dismissal takes effect. The time limit for lodging a general protections claim based on dismissal has also been changed from 60 days to 21 days. This should be welcomed by employers, as employees will now need to decide whether to lodge an unfair dismissal or a general protections claim (rather than one, followed by the other; or the pursuit of a general protections claim that should properly have been brought as an unfair dismissal claim).

5.  Under certain circumstances Fair work Australia will be capable of dismissing unfair dismissal applications at their discretion. This will apply where the parties have concluded a settlement agreement, when an applicant fails to attend a proceeding relating to the application or where the application fails to comply with Fair Work Australia directions or orders relating to the application.

6.  Fair Work Australia will be able to demand a party pay costs if through an unreasonable act or omission they have caused the other party to incur a cost. This recommendation reflects concerns that unscrupulous lawyers or agents are encouraging dismissed employees to pursue unfair dismissal claims without merit on a no-win, no-fee basis. They can also demand a party pay a cost order if they fail to agree to a settlement that is deemed reasonable.

Change of Name

7.  It was proposed that the name of Fair Work Australia would be changed to a new title containing the word ‘Commission’ and no longer containing the words ‘Fair Work’ due to the considerable confusion caused by having a number of agencies with similar names (e.g. FWA, the Fair Work Ombudsman (FWO), and more recently Fair Work Building and Construction (FWBC).

The Amendment Act has made several important changes to the structure and operation of FWA, and has re-named  the tribunal as the Fair Work Commission (FWC). The Government opted for FWC, indicating that the word “Commission” more accurately reflects the tribunal’s functions.

Superannuation

8. The establishment of an ‘Expert Panel’ to deal with minimum wage decisions and default superannuation funds for employees who do not nominate their own superannuation fund and are covered by a modern award.

The commencement date of the changes introduced by the Amendment Act is currently unclear.

As an employer, you should obtain advice about how these changes affect your contracts, Enterprise Agreements and HR policies and procedures.

Be aware what the pending changes to unfair dismissal could mean for you as an employer:

• check the date of unfair dismissals applications and general protection claims relating to a termination of employment complies with the new time limits; 
• seek advice on whether the applicant's initial documentation lodged with the Fair Work Commission provides sufficient information about the alleged circumstances of their dismissal;
• seek advice on whether there are grounds to apply for a cost order; and
• seek advice on whether there is scope to apply to the Fair Work Commission for an unfair dismissal application to be dismissed.

To minimize your risk as an employer, you should consider contacting Annette at End2End Business Solutions on (02) 8977 4002 for advice on employee dismissals for your business.