Agreements need action

WORKPLACE agreements registered on or after March 22 2001 have now expired, while those registered before March 22 will expire on September 14.

The old workplace agreement will continue to operate similar to a statutory contract, however if there is a relevant award covering the business then the provisions of that will need to be factored in.

If the worker continues to be paid on the terms of the old workplace agreement, and that agreement is inferior to the award, then the employer may be breaching award conditions.

A fine of up to $2,000 can be imposed for each breach of an award. For example, if the employee was on a weekly pay schedule and for four weeks that pay was below the award, then that is effectively four award breaches.

Employers can contact the Department of Consumer and Employment Protection’s Wage-Line service on 1300 655 266.

Under the Labour Relations Act there are transitional provisions to govern what happens when a workplace agreement expires.

These transitional provisions have been designed to act as a safety net, however some legal experts believe there are holes in the legislation that could trap unwary employers.

According to the Department of Consumer and Employment Protection website, when a workplace agreement expires, the terms of the workplace agreement will combine with any other terms of the employee’s contract to form a new contract of employment, providing the old workplace agreement met the minimum standards of employment test. If no award applies then this will determine the employment relationship.

However, if an award or enterprise bargaining agreement covers the employee, the contract of employment will also be subject to the award.

This means that the employee will receive the higher of either their entitlement under the terms of their new contract or the relevant award.

Department of Consumer and Employment Protection acting director compliance and education, Brian Appleby, said how the cessation of workplace agreements affected employers would depend on whether there was an award or industrial agreement covering their industry.

“If there is no award or other industrial instrument covering their industry then the workplace agreement becomes their contract rate of pay,” he said.

“If there is an award or EBA in place then the employee can’t be any worse off than the award or industrial agreement.”

Mr Appleby said employers needed to calculate the annual pay rate the employees would be receiving under their workplace agreement and the annual pay rate they would receive through the award or other industrial agreement.

The employee has to receive the higher rate of pay.

“The employer also has to take into account the non-monetary benefits in things such as awards,” Mr Appleby said.

Jackson McDonald partner Maria Saraceni said an expired workplace agreement would act as the basis of the contract of employment.

“The bottom line for them is the old expired workplace agreement contract and the top up that comes from the relevant award,” she told WA Business News.

Blake Dawson Waldron partner David Parker said there were differing opinions on whether the transitional provisions the State Government had provided would cover all bases.

“There seems to be a feeling that the worker won’t get the best of both worlds,” he said.

Mr Parker said it was difficult to generalise how the cessation of workplace agreements would affect a business.

“It really needs to be looked at on a case-by-case basis,” he said.

Mr Appleby said employers might need to change the way their business operated if it became too expensive to maintain their current work practices under awards.

“If there is an award in place and the employer feels he can’t afford the penalty rates to have a worker working on the weekend then he can look at how his business operates,” he said.