Western Australian businesses that have introduced Australian Workplace Agreements during the past two months are now operating under a new fairness test governing the removal of protected conditions.
Western Australian businesses that have introduced Australian Workplace Agreements during the past two months are now operating under a new fairness test governing the removal of protected conditions.
The Workplace Relations Amendment (A Stronger Safety Net) Act 2007 was passed at the end of June, backdated to be effective as of May 7, and will govern the 52,000 AWAs that have been lodged nationally since then.
The fairness test was drafted to compensate employees for the loss or amendment of any protected conditions, such as penalty rates or overtime loadings.
It applies to those employees earning less than $75,000 per year who would have previously been covered by a state award or are working in an industry where a federal award would apply.
The test also covers workers previously subject to a preserved state agreement or a notional agreement preserving a state award.
If an organisation breaches the fairness clause, the federal Workplace Authority will recommend a periodic pay rate of suitable compensation for the removed conditions.
Employers must draft a new agreement within 14 days of the breach, or the agreement is declared void and affected employees will revert to the award rate.
Penalties also apply for dismissing an employee if an agreement does not pass the fairness test ($6,600 for an individual or $33,000 for a body corporate), or if an employee is coerced into agreeing to a modified award condition.
The Chamber of Commerce and Industry WA has expressed several concerns about the legislation.
Firstly, it believes the new rules may result in some agreements being subject to a higher award rate that did not previously apply.
The CCI is also concerned at the $75,000 gross basic salary cap, which it believes should be changed to include total salary packages of that amount.
The Australian Chamber of Commerce and Industry, of which CCIWA is a member, has made a submission to a Senate committee inquiry into the bill, addressing this issue of salary cap.
It also aims to prevent unions from taking court action over back pay or breaches of new unfair dismissal rules and to protect award-free employers from facing prosecution if an agreement has been lodged citing an incorrect benchmark award.
The government announced last week that employers and employees would be sent letters in coming weeks notifying them of the relevance of the fairness test to their agreements.
In addition to the fairness test, the new act includes a workplace relations fact sheet, which must be issued to new employees within seven days of their commencing employment at an organisation.
The fact sheet, which provides information about protected conditions and the fairness test, must also be given to existing employees within three months of July 20, when the fact sheet becomes available from the Workplace Authority.
The penalty for failing to provide a fact sheet to employees is $110.
