Author: Belinda Sundaraj, editor of the Australian Fair Work Act 2009 with Regulations and Rules – 8th Edition
Compliance with laws governing employment is key to a positive relationship with your employees and business success. Over the course of successive governments since the Howard years, employment law in Australia has been streamlined and simplified through the expansion of the Federal system to cover most employers.
This streamlining has been both a blessing and curse for employers. It has created one set of laws covering employees regardless of what state they are employed in. This change has simplified the obligations you have as an employer but it also means most employers have found themselves covered by a new system with all the confusion that follows change.
Most employers have settled into the Federal system now and it is here to stay but industrial relations and employment law remains a hot political topic to be tinkered with constantly by whichever party is in power.
Knowing your obligations is even more important as the consequences for non compliance are greater than ever. These consequences may be in the form of penalties imposed by the courts or the resources wasted on failed initiatives.
A good example of a poor understanding of the law can be seen in the case of Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Ltd  FWCFB 2887 (31 May 2016).
- In this case a Full Bench of the Fair Work Commission (FWC) refused to approve an enterprise agreement for Coles Supermarkets on the basis that it did not pass the ‘better off overall test’ (BOOT). The decision has significant implications for employers, particularly when negotiating and seeking approval of agreements to cover a large and disparate workforce.
- In this case the proposed agreement did what most agreements do – it traded off improved conditions in some areas for reduced conditions in others. The key to these trade offs is, of course, that employees must be ‘better off overall”. At first instance the agreement was approved, with Coles giving some undertakings to address the FWC’s concerns about its application.
- Subsequently, the decision to approve the agreement was appealed by employees negatively affected by these trade offs. The appeal was supported by a union with affected employees. These employees worked a significant number of shifts that attracted penalty rates and under the proposed agreement these rates were reduced.
- The affected employees did not receive any benefit in return for reduced penalties and consequently were not better off overall. The affected employees were a relatively small proportion of the more than 78,000 employees covered by the agreement but the BOOT requires that the employer demonstrate that all employees are better off overall, not just most.
- Undertakings could have been given, and were sought by the FWC, that these employers would not have their conditions reduced but Coles refused to give such an undertaking.
- Consequently the agreement was refused approval by the FWC and Coles will now need to go through the entire negotiation, voting and approval process again. This is a costly exercise for 78,000 employees.
Fines for non compliance with these laws can cost hundreds of thousands of dollars, further underscoring the need for up to date and accurate information on your obligations.
Wolters Kluwer publishes the Fair Work Act 2009 and other employment legislation, including rules and regulations. All the legislation you need to comply with your federal obligations is included in the 8th edition of the Fair Work Act 2009 book released in September 2016. This new volume incorporates all operative amendments to 1 August 2016, details the history of the legislation with each amendment, and includes a comprehensive index for ease of use.