On 13 February 2008, Julia Gillard, the Minister for Employment and Workplace Relations, introduced into Parliament, the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. Attached to the introduction of the Bill is a 98-page Explanatory Memorandum. This Bill introduces the first tranche of amendments to the Workplace Relations Act. Further amendments are foreshadowed for later in the year.

The “Forward with Fairness” amendment to the Workplace Relations Act is not totally a “Back to the Future” amendment in that it repeals only a few aspects of the Work Choices legislation. This Bill does not represent a return to the Hawke/Keating era of industrial regulation.

The Bill largely fulfils the ALP’s promises to abolish Australian Workplace Agreements (AWAs), although does so in a measured, tiered manner save for the Federal Public Service in which AWAs will be abolished immediately. However, AWAs continue in one particular, albeit circuitous manner, for those who earn over $100,000 per annum. Such employees will be free to agree to their own pay and conditions without reference to awards. This is said to provide “greater flexibility for common law agreements which have previously been required to comply with all award provisions, no matter how highly paid the employee”.

The Opposition, when met with this Bill, dithered somewhat on the abolition of AWAs. However, at the time of writing it had expressed its support for the abolition of AWAs when the Bill reaches the Senate. One key aspect in which the Bill builds upon the Work Choices legislation is that it confirms the centralisation of workplace relations. No doubt as a result of the gift the former Coalition Government delivered of a national industrial relations system, the Federal Government will not permit a return to a Federal/State industrial relations system despite the wish for that to happen by some state Labor Governments.

As to what happens in the long term regarding the State regulation of industrial relations, particularly in New South Wales, Queensland and Western Australia, is a matter left unsaid in this Bill. These three Labor states have long had profound and vibrant State-based systems, which although not killed off by Work Choices, have been damaged.

It will clearly be a debate for the future as to whether the State industrial relations systems continue, or whether they are ultimately, by consent of those States, subsumed into one national unitary system.

The Bill says nothing about another aspect of the election campaign as unfair dismissals and the current unfair dismissal rules will, in the foreseeable future, remain in place.

Among the many changes to AWAs, it is to be noted that existing AWAs that are made and lodged before the date of the commencement of the Bill, will continue to operate until terminated or replaced. No AWAs will be entered into by the Australian Public Service sector, and so that there is less diversity of employment conditions in any particular workplace, the Bill introduces a new form of individual industrial agreement called an Individual Transitional Employment Agreement (ITEA), which will exist side by side with AWAs until the latter expire.

The previous so-called “fairness test” will be replaced by a “no disadvantage test”, which will be designed to ensure that the overall terms and conditions of an employee whose employment is governed by an ITEA will not be below the standard set by an applicable collective agreement. Other matters such as award modernisation and National Employment Standards will replace the current standard when the new workplace relations system comes into effect in 2010.

As to what the future will be, what is clear is that workplace relations will continue to be an area of uncertainty and will require all employers, particularly those with large workforces, to closely scrutinise this first attempted amendment. Workplace relations legislation has grown in size and complexity over the years. The future regulation will continue to be in a state of flux, depending upon what ultimate changes are negotiated within the Parliament and, more importantly, what changes are agreed to by the Federal Government and New South Wales, Queensland and Western Australia.

On the day after the “Forward with Fairness” Bill was introduced, members of the Labor Caucus endorsed Prime Minister Rudd’s symbolic 12-month wage freeze. No doubt most employees will hope this wage freeze is not a precedent to be followed for the rest of the workforce.

Contributed by Jeffrey Phillips SC of Denman Chambers, February 2008. Originally published as Bulletin 3 to National Workplace Relations.

Jeffrey Phillips SC is a member of the Thomson Reuters National Workplace Relations Editorial Board.