Legal Comment by Mark Illidge of Hinterland Lawyers

February 2008

Assuming Labor is able to gain support in the Senate, Labor's Forward with Fairness will become the federal industrial relations policy.

Under Labor's reforms, federal industrial relations law will be administered by Fair Work Australia. It is proposed that Fair Work Australia will provide information, advice and assistance to both employees and employers. Another function of Fair Work Australia will be to hear unfair dismissal claims.

 How will Fair Work Australia effect small business (businesses employing less than 15 employees)?

Labour has promised that small business will be:

• protected from employees making an unfair dismissal claim within the first 12 months of employment;
• allowed to dismiss employees in cases of redundancy;
• excluded from a planned national employment standard for redundancy payments; and
• not ordered to reinstate an employee if reinstatement is not in the best interests of the employee or the employer’s business

 Labour has also promised that Forward with Fairness will give employers the choice of the following instruments:

• awards with flexibility clauses for employees who are paid above the award rate;
• collective enterprise bargaining agreements which employers can negotiate directly with their employees;
• individual common-law agreements with scope for individualised flexibility arrangements such as work hours and holidays.

Forward with Fairness is due to be fully implemented by 31 January 2010. Until then, businesses currently using AWA's may use Individual Transitional Employment Agreements so long as they do not disadvantage the employee against a collective agreement or applicable award. Existing AWA's will operate for their full term, up to five years after the election.

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