VECCI Update (Issue 33)

ALP shifts on Construction Industry Watchdog

In a recent speech to the National Press Club the Deputy Leader, Julia Gillard, has also indicated that the ALP’s position on retention of the Australian Building and Construction Commission has shifted.

The ALP has until now stated that the ABCC would be disbanded and its role taken over by a separate division within the new Fair Work Australia body.

However, in this recent speech Julia Gillard refers to the ‘persistent and pervasive unlawful behaviour in the construction industry’ and indicates that under a Labor Government the ABCC would remain in place until the end of January, 2010.

This is an important and welcome shift in thinking from the ALP given the ABCC’s pivotal role in responding to some of the entrenched IR issues that have, up until recent times, seemed to have been an inevitable part of doing business in the building and construction sector.

A whole range of factors, including recent figures about the levels of industrial disruption, point to a dramatically different environment in the building and construction sector in recent times and the role and work of the ABCC is generally viewed as having been instrumental in this turn around.

However, the future for individual agreement making under a possible future Labor Government is not so optimistic. The Deputy Leader’s speech provides no indication of any shift away from Labor’s stated position to date that would see the end of the AWA/individual agreement making option.

David Gregory, General Manager
Workplace Relations Policy
Victorian Employers Chamber of Commerce & Industry
Phone: 03 8662 5364
Email: dgregory@vecci.org.au
Web: www.vecci.org.au

‘Fairness Test’ Amendments now before the Senate

The Federal Government’s proposed amendments to the Workplace Relations Act, to introduce a so called ‘Fairness Test’, have been passed by the House of Reps. and are currently before the Senate. The Government hopes to have the legislation passed before the end of the current Budget sittings which conclude on 21st June.

These amendments make significant changes to the framework that was originally put in place by the WorkChoices reforms. Agreements put in place prior to the recent changes coming into force will not be affected and will continue to operate on the basis of their current terms and conditions.

However, the Government intends that relevant agreements intended to pit in place from 7th May would have to satisfy the new fairness test requirements.

The changes, if passed, would apply to all collective agreements, and to AWA’s covering employees being paid a wage or salary of less than $75,000, IF a proposed Agreement ‘excludes or modifies’ any of the designated ‘Protected Conditions’ in the relevant award.

The protected conditions in awards are those dealing with public holidays entitlements, rest breaks, leave loadings, allowances, shift/overtime rates, penalty rates generally, and any incentive/bonus payment clauses.

Under the proposed changes –

• Agreements would continue to operate from the date lodged, but would now be subject to the ‘Fairness Test’ assessment,
• If any of the Protected Award conditions are proposed to be excluded or modified the employee is to receive ‘fair compensation,’
• If the Fairness Test is found to not have been met the employer would be required to make back payment for any loss incurred.

There is also an ‘exceptional circumstances’ option that could come into play where an agreement is part of ‘a reasonable strategy to deal with a short term crisis in, and to assist in the revival of, the employer’s business.’ In those circumstances regard could be had to the industry, the location, the economic circumstances of the employer, and the employment circumstances of the employee.

The fairness test does involve a return to something like the old no disadvantage test although it would appear that it is going to be as rigid in its application as was the case in the past with a range of benefits being able to be offered in negotiations in terms of what might satisfy the fairness test.

Further information about the changes will be provided when the details have been confirmed.

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