Tuesday, 17 November 2015

Changes to the Fair Work Act and Greenfields Agreements

On 11 November 2015, the House of Representatives passed changes made by the Senate to the Fair Work Amendment Bill 2015 (FW Bill).

The Key Changes Impacting Employers in the FW Bill

Greenfields agreements

Under the Fair Work Act, greenfields bargaining (ie. bargaining for a new project where no employees are currently employed) is not currently subject to good faith bargaining rules. Employers negotiating greenfields agreements currently need the agreement of the union or unions able to represent a majority of employees who will be covered by the agreement to make a greenfields agreement. There had been widespread criticism of the existing rules, with many employers complaining that the requirements give unions an unfair advantage and enable them to hold employers to ‘ransom’.

The FW Bill will give employers greater confidence in negotiating greenfields agreements as the changes seek to ensure there are realistic timeframes for the negotiation, and that negotiations do not delay or jeopardise investment in major projects, while simultaneously providing that the interests of employees to be covered by such agreements are protected.

The changes to the greenfields provisions will enable employers to take their proposed greenfields agreements to the Fair Work Commission for approval if no deal had been reached within a “negotiation period” of six months. This period was increased from three months as proposed in the original bill. These new greenfields provisions will be reviewed within two years.

Protected action ballot orders

The Fair Work Act currently permits employers and employees to engage in protected industrial action in support of claims for an enterprise agreement provided that certain requirements are satisfied. One of these requirements is that protected industrial action must be authorised by a protected action ballot of employees. A previous decision of the Federal Court had held that where a union was faced with an employer that refuses to bargain, the union would not be obliged to seek a majority support order or jump other hurdles before asking members to authorise industrial action.

The FW Bill provides that the right to take protection industrial action will now be conditional on the parties having commenced bargaining for a proposed agreement, and on majority agreement from all employees in the relevant group.

Extending unpaid parental leave

Under the Fair Work Act, an employee has the right to request an additional 12 months’ unpaid parental leave after an initial 12 months’ unpaid parental leave. An employer can only refuse such a request on reasonable business grounds and must provide written reasons for their decision if the request is refused. However, there is no statutory requirement for a request to be discussed with the employer.

The FW Bill will require employers to provide a reasonable opportunity to discuss an employee’s request for an extension of unpaid parental leave before a request is refused.

Proposed Changes that were Not Included in the FW Bill

The more substantial changes introduced in the original Bill did not attract sufficient support and have not been included in the FW Bill. These included proposed changes to the following areas:

  • Individual Flexibility Agreements (IFA) – to limit the use of IFAs in enterprise agreements and to extend the notice period for terminating IFAs in enterprise agreements from 4 weeks to 13 weeks;
  • Right of entry – to change the default location for interviews and discussions with union officials from the employer’s lunch room and to limit access to permit holders who are either a party to an enterprise agreement or who are invited by an actual or potential union member;
  • Annual leave – to clarify that leave loading is not payable on termination unless there is provision in a modern award or enterprise agreement; and
  • Unfair dismissal – to provide the Fair Work Commission with greater powers to dismiss unfair dismissal proceedings

The government has made a commitment to continue discussions with Senate cross benchers to achieve these additional changes.

In the meantime, the changes in the FW Bill will come into effect on the date after it receives Royal Assent.

If you would like to understand the impact of these upcoming changes on your business, please do not hesitate to contact HR Legal on the details below.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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