Two days. That’s all the time that is left before the Rudd Government’s new Fair Work industrial relations regime starts, but many workplace lawyers say Australian employers simply haven’t spent enough time understanding what the new rules mean for their business.
“The reality is most people are trying to survive the recession and haven’t thought about workplace issues,” workplace lawyer and SmartCompany legal expert Andrew Douglas says.
In some areas, the changes are huge. And what’s more, lawyers say unions are eagerly waiting to test the boundaries of the new laws in front of the new workplace umpire, Fair Work Australia.
Here are the five big areas of concerns that employers need to understand.
Under WorkChoices, employers will 100 staff or less were protected from unfair dismissal. Under Fair Work, that protection is gone.
“I think employers, particularly those who have less than 100 employees, need to remember that unfair dismissal is back on for young and old and there are very few exclusions that will protect you,” says Joydeep Hor, managing partner at Harmers Workplace Lawyers.
Yes, there is an exception for employers with less than 15 employees. But even if you have less than 15 employees, you must comply with the Fair Dismissal Code and complete a special checklist (you can see it here) when you terminate an employee. The checklist includes giving the employee a warning and the opportunity to respond. If a claim is made against you, the new IR regulator Fair Work Australia will look at the checklist and if it is satisfied all boxes are ticked, you are safe from further claims.
Hor says some employers might revert to the old tactic of paying ‘go away’ money to ensure sacked staff don’t make a claim, but warns this might not work.
“They could find themselves in for a very rude shock and that reinstatement could become par for the course.”
Andrew Douglas and Peter Vitale from CCI Lawyers are expecting a lot of action around new laws about flexible work arrangements.
Vitale says that employees will be able to ask an employer to allow arrangements such as part-time work, variable start and finish times, or arrangements that allow an employee to care for a child up to school age or a disabled child up to 18 years of age.
An employer may refuse such a request only on ‘reasonable business grounds’, which must be provided in writing to the employee.
“The greater flexibility that’s enshrined in the new legislation and the powers to enforce will mean that many employers will fall foul of that,” Douglas says, noting that many employers have cut back on flexible arrangements during the downturn as a way of saving labour costs.
The new laws introduce a requirement for an employer to make sure an employee who is made redundant falls into ‘genuine redundancy’. To satisfy this requirement, employers have to be able to prove that the business was unable to redeploy the employee into any other part of the business or a related business.
Peter Vitale says it is not exactly clear how this redeployment requirement will work. He points out that for a medium-to-large-sized company with a number of divisions in a number of locations, simply investigating redeployment is going to be a difficult and time-consuming problem.
Peter Vitale’s sleep issue under the new Fair Work laws concerns discrimination. There are new provisions in the new laws saying that employers can’t take adverse action against an employee on certain discriminatory grounds. The grounds include race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, religion, pregnancy, political opinion, national extraction or social origin.
That all sounds fine, but there is a kicker – the reverse onus of proof. That is, once an employee makes an allegation, the employer must disprove it. “This can put an employer in a very difficult position,” Vitale says.
Vitale’s advice on preparing for these laws is get specific advice if you are planning to change employment conditions and have any doubts, because the legislation has changed substantially and there are a lot of new hurdles.
It’s not just the lawyers gearing up for a busy period after the introduction of Fair Work – the unions are also stepping up activity as they seek to reclaim ground lost under WorkChoices.
Joydeep Hor urges businesses to make a proper assessment of their ‘industrial risk profile’.
“Just because unions have not figured prominently in your world, they will,” Hor says. “The unions will be trumpeting their achievements, that trumpeting will attract noise and that noise will attract membership.”
“A lot of my clients have their head in the sand about that – they just don’t think unions are an issue for them.”
Douglas also expects a rise in lawful and unlawful industrial action and says this inevitably means higher costs for employers.
“Employers will settle industrial disputes much more quickly for higher amounts. There is such a loss to the business through industrial action that they will settle.”
Vitale also points out that Fair Work Australia will have the power to require employers disclose information to unions as part of the bargaining process.
You’re going to need time and a bit of money to tackle these issues.
Firstly, employers need to lift their game in the area of record keeping. Performance reviews and formal warnings need to be carefully documented and employers should also look at keeping registers that list each staff member’s skills and weaknesses (this could be particularly important in proving ‘genuine redundancy’).
Hor says companies will also need to think about beefing up their industrial relations know-how if they are going to be dealing with unions.
“The last 12 or 13 years in human resources has not seen much prominence in terms of industrial relations,” he says.
That’s about to change.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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