July marked the commencement of a number of new workplace relations laws and most notably, the new Fairness Test. These changes also coincide with the Australian Fair Pay Commission’s minimum wage determination of 5 July 2007, which takes effect from 1 October 2007.

Fairness Test

Further to our Newsletter of 8 May 2007, the Fairness Test for workplace Agreements has now been passed.

The introduction of the Fairness Test was a key aspect of the Workplace Relations Amendment (A Stronger Safety Net) Act 2007, which received Royal Assent on 28 June 2007.

The Fairness Test applies to certain workplace agreements and variations to workplace agreements lodged on or after 7 May 2007 that remove or change particular protected conditions.

The test applies to AWAs and collective agreements that:

• cover employees who:
• are otherwise subject to an award or a preserved state instrument; or
• work in an industry or occupation usually regulated by an award;
• modify or exclude one or more protected award conditions; and
• for AWAs, where the employee is on an annual gross basic salary that is less than $75,000.

The effect of the Fairness Test is that – in addition to the requirement that the agreement provides, at least, the terms and conditions of employment guaranteed by the Australian Fair Pay and Conditions Standard – the agreement must fairly compensate affected workers for the change to or loss of the relevant protected award conditions.

All workplace agreements are now to be lodged with the Workplace Authority (formerly the Office of the Employment Advocate), which will apply the Fairness Test to agreements subject to it.

If the Workplace Authority decides that a workplace agreement does not pass the test, the employer will be given 14 days to provide a written undertaking to vary the agreement, or in the case of an AWA, formally vary the agreement to pass the test. If that is not done, or the Workplace Authority decides that the varied agreement still does not pass the test, the agreement will cease to operate and the employer may be required to pay compensation to the employees.

Further information on the Fairness Test, including the lodgment and assessment process is outlined in our 8 May 2007 newsletter.

Workplace Relations Fact Sheet

On 4 July 2007, the Federal government released the Workplace Relations Fact Sheet which contains certain information for employees.

From 20 July 2007, all Federal system employers are required to give the Fact Sheet to their employees as follows:

• current employees must be provided with the Fact Sheet by 20 October 2007;
• new employees must be given the Fact Sheet within 7 days of commencing work.

The Fact Sheet contains information about employee entitlements including the Australian Fair Pay and Conditions Standard, protected award conditions, an overview of the Fairness Test and the role of the Workplace Authority and the Workplace Ombudsman.

The Fact Sheet can be accessed online at:

www.workplaceauthority.gov.au/graphics.asp?showdoc=/employers/WorkplaceRelationsFactSheet.asp.

A $110 fine applies for each occasion that an employer fails to provide the Fact Sheet to an employee as required.

Workplace Authority and Workplace Ombudsman

The Office of the Employment Advocate and the Office of Workplace Services commenced their respective new roles as the Workplace Authority and Workplace Ombudsman on 1 July 2007.

The Workplace Authority now performs an increased range of functions including:

• assessment of workplace agreements against the Fairness Test;
• upon request – pre lodgment assessment of proposed workplace agreements;
• provision of an advisory service about agreement making to employers and employees;
• provision of an information service about pay and conditions issues; and
• an advisory service focused upon meeting the needs of young people.

The Workplace Ombudsman now takes on a greater range of functions associated with policing the Workplace Relations Act, including increased audit activity to ensure compliance by employers with their obligations under the Act.

One of the Ombudsman’s functions will be to ensure that employers liable to pay back pay to employees for workplace agreements that did not pass the Fairness Test meet that obligation.

AFPC Minimum Wage Decisions July 2007

The Australian Fair Pay Commission (AFPC) has increased the standard Federal Minimum Wage by $10.26 per week and has awarded an increase of approximately $10.25 per week for employees on Pay Scales of up to $700 per week, and $5.30 per week for those on Pay Scales above $700 per week.

The determination takes effect from the first pay period on or after 1 October 2007.

The increases also flow on to casual employees, junior employees, employees to whom training arrangements apply and employees with a disability.

The wage increases do not apply to employees covered by preserved state agreements or pre- WorkChoices AWAs or certified agreements, where those agreements deal with basic rates of pay.

Increase to the Federal Unfair Dismissal Remuneration Cap

The remuneration threshold for making an unfair dismissal claim under the federal Workplace Relations Act has increased from $98,200 to $101,300.

The new limit took effect from 1 July 2007.

The maximum compensation payable to unfair dismissal claimants has also increased from $49,100 to $50,700.

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