The Fair Work Act

The start of 2010 sees full the implementation of the Federal Government’s Fair Work Act. The National Employment Standards (NES) will guarantee minimum terms of employment for all employees covered by the Federal Workplace Relations System as of 1 January 2010. Therefore, the standards will apply in Victoria, ACT, NT with some application in other states not covered by the Federal system. In this article, we will cover some of the aspects of the new National Employment Standards.

The release of the NES coincides with a request to the Australian Industrial Relations Commission (AIRC) to modernise awards. Therefore also as of 1 January 2010, all “modern awards” must meet the minimum standard set out in the NES. However, the AIRC will retain the flexibility to add provisions to the modern awards, provided they are not detrimental to employees.

Some of the aspects of the FWA such as unfair dismissal and redundancy payments make concessions to small businesses (that is less than 15 members of staff).

The Fair Work Act website www.fairwork.gov.au contains more information.

Maximum weekly hours: In general, employers cannot ask their employees to work more than 38 hours per week. This can be averaged over 12 months by arrangement and must be agreed in writing. However, employees may need to work reasonable additional hours.

Flexible working arrangements: Employees have the right to make a written request for flexible working arrangements if they are a parent of, or having responsibility for the care of, a child under school age. This also applies to disabled children under the age of 18. Requests can only be refused on “reasonable business grounds” (not specifically defined in the Fair Work Act).

Unfair dismissal: The Unfair Dismissal provisions apply to employees who have been at an organisation for more than 6 months. For small businesses, they take effect after a 12 month employment period. For more on how employers should approach the new aspects of the Unfair Dismissal provisions, read the article Unfair Dismissal - Make your business thrive.

Leave entitlements: Employers must generally give all permanent full-time employees at least:

	4 weeks paid annual leave
	10 days paid sick / carer’s leave per year
	2 days compassionate leave (if needed)
	12 months unpaid parental leave.

Parental leave: On the birth or adoption of a child, employees are entitled to 12 months unpaid parental leave which, upon request, can be extended by another 12 months. This can only be refused on “reasonable business grounds”. New parents can split the unpaid leave but it can only be taken by one parent at a time. Employees must have 12 months continuous service to be eligible.

Annual leave: Some of the modernised awards may enable employees to request to “cash out” up to 2 weeks of their annual leave every year. However, the employee's workplace agreement must allow the employee to cash out annual leave.

Termination and redundancy: The NES sets out the period of notice required to be given by employers when terminating an employee’s employment which is dependent on the length of employee service. One year of service requires a minimum of one week’s notice whereas five years service requires a minimum of four weeks notice. The required period of notice is increased by one week if the employee is over 45 years old and has completed at least two years of continuous service.

Redundancy pay is not required to be paid if:

	the person has been employed for less than 12 months or
	it is a small business or
	the employee’s employment is terminated due to the ordinary and customary turnover of labour.

Workplace entry: Fair Work Inspectors may inspect a workplace if they believe work governed by the FWA is being done there. Whilst they cannot use force to enter the workplace, they do not need permission from the occupier. Union officials who hold an FWA permit can enter a workplace during business hours to investigate a suspected contravention of standards or an award agreement. Union officials must give the required notice.

Fair Work Information Statement: The NES requires employers to provide new employees with a Fair Work Information Statement which will contain information about the NES, modern awards, agreement-making, the right to freedom of association and the role of Fair Work Australia.

These are some of the requirement of the new Fair Work Act. The website www.fairwork.gov.au has a lot more information and is easy to use and understand. Small businesses will also find the website of the Council of Small Business of Australia very useful. With the introduction of these new laws on 1 January 2010, we recommend all employers familiarise themselves with the requirements.

Published : 9 November 2009