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Recent developments in Industrial Relations

This has been a particularly busy six months or so for the Fair Work Commission.  Most of the action and activity are focused on the review of modern awards.  There are three particular aspects that are most important.  They are:

1. The review of penalty rates.

From 23 February 2017 the full bench of the Fair Work Commission issued a decision dealing with weekend and public holiday penalty rates in a number of modern awards.  The awards included:

  • the Fast Food Industry Award 2010;

  • the General Retail Industry Award 2010;

  • the Hospitality Industry (General) Award 2010;

  • the Pharmacy Industry Award 2010;

  • the Registered and Licensed Clubs Award 2010;

  • the Restaurant Industry Award 2010; and

In general terms the decision reduced the Sunday penalty rates to 150% for fulltime and part time employees and to 175% for casual employees for some , but not all of the above awards. 

On 5 June 2017, the Fair Work Commission issued a further determination dealing with the implementation of the reduction.  They propose a very gradual reduction over time.  For most awards the deduction applicable from 1 July 2017 is only a reduction on the rate of penalty rates by only 5%.  Under most awards penalty rates will  be reduced by a further 10% on 1 July 2018 and a further 10% on 1 July 2019.

It is worthwhile pointing out that over time at least some of the impact of the reduction in penalty rates will be offset by increases in award rates over the next two years.

2. Domestic Violence Leave and conversion of casual employment

Coupled with the penalty rates decision, there have been two other interesting areas dealt with in the review of the modern award process.  These include domestic violence leave and conversion of casual employment. 

Neither decisions have been finalised.  The decision dealing with domestic violence leave indicates that at this stage the full bench that dealt with that particular issue was minded to allow a limited period of domestic violence leave but generally on an unpaid basis.  It also appears likely that the majority would allow workers to access personal and/or carers leave during a period of absence on domestic violence leave.  Further submissions have been invited.  The final format of the domestic leave provisions under modern awards will not be determined until later this year.  It appears likely that only a relatively short period of unpaid leave will be allowed.

The other interesting variation is that modern awards are likely to be varied to include a provision allowing for conversion of casual employment to either permanent part time or permanent fulltime employment.  These provisions have been common in awards previously.  Many of the manufacturing awards have had these provisions.  It appears likely that they will be inserted in more of the modern awards.  This is not surprising.  Casual employment has grown rapidly in Australia.  Giving long term regular and systematic casuals an opportunity to convert to permanent employment is understandable.  Such an application can only be refused on reasonable business grounds .  Reasonable business grounds could include substantial fluctuations in the work.  At this stage the exact provision of this entitlement is yet to be determined.  

3. Other changes

In addition to these areas, the Fair Work Commission also increased the national minimum wage.  It is now $694.90 per week or $18.29 per hour.

The high income threshold has increased.  It is now $142,000.  Only workers who are paid less than this amount or are employed under an industrial agreement can access a claim for unfair dismissal.

Similarly, the maximum amount that can be awarded for compensation in a claim for unfair dismissal is now fixed at $71,000.

It is has been an interesting six months in Federal Industrial Relations.  There are substantial changes which are in the process of being introduced.  Further substantial changes are inevitable.

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